Is AGNC Investment a Buy Below $11 Amid Easing Interest Rates?

Here's the deal: AGNC Investment Corp. (AGNC) is trading below $11 per share, and with the Federal Reserve's pivot toward rate cuts, this leveraged mortgage REIT is primed to capitalize on a favorable macroeconomic environment. Let's break down why AGNC could be a compelling buy for investors willing to stomach the inherent risks of a high-leverage, interest-rate-sensitive business model.

Valuation Metrics: A Tale of Two Metrics

AGNC's price-to-book (P/B) ratio has surged from a low of 0.49 in December 2022 to 1.19 as of November 28, 2025, reflecting a sharp re-rating of the stock. This increase suggests the market is beginning to value AGNC closer to its tangible net book value (TNBV), which stood at $8.28 per share as of September 30, 2025. At a stock price of $10.49, AGNC trades at a 27% premium to its TNBV-a far cry from the deep discounts seen during the 2022-2024 rate-hiking cycle.

But here's the kicker: AGNC's leverage amplifies both its risks and rewards. With an at-risk leverage ratio of 7.6x as of September 30, 2025, the company's earnings and book value are highly sensitive to even minor shifts in interest rates. This leverage, however, works in its favor when rates are falling. For every 10-basis-point decline in short-term rates, AGNC's net interest margin and dollar roll income could expand, directly boosting its TNBV and dividend sustainability.

Fed Policy: A Tailwind for Leveraged mREITs

The Federal Reserve's 2025 rate cuts are a game-changer for AGNC. Lower borrowing costs reduce the pressure on its NIM, which had been squeezed during the 2022-2024 tightening cycle. For context, AGNC's TNBV per share rose from $7.81 to $8.28 in Q3 2025 alone, driven by tighter mortgage spreads and reduced funding costs following the Fed's rate reductions.

AGNC's proactive hedging strategy further insulates it from volatility. The company maintained 68% interest-rate hedge coverage as of September 30, 2025, a buffer against unexpected rate hikes. This defensive positioning is critical in a sector where even a 50-basis-point rate spike can erode earnings.

Risks and Rewards: A Calculated Bet

AGNC isn't for the faint of heart. Its leverage and duration mismatch (short-term debt funding long-term MBS) expose it to rising rates. However, the current macro environment-characterized by falling rates and a Fed committed to easing-creates a near-ideal backdrop. AGNC's focus on high-quality Agency MBS also provides a stable income stream, as these securities are backed by the full faith and credit of the U.S. government.

At $10.49, AGNC trades at a 27% premium to its TNBV but still offers a compelling risk-rebalance. If the Fed continues its rate-cutting trajectory, AGNC's TNBV could climb further, potentially pushing the stock price higher. Conversely, a rate hike would compress its NIM and drag on book value-a risk investors must weigh.

The Bottom Line: A Buy Below $11?

AGNC is a high-conviction play for investors who believe the Fed's easing cycle will persist. Its current valuation reflects a balance between risk and reward: a leveraged model that thrives in falling-rate environments but falters in rising ones. At $10.49, the stock is undervalued relative to its TNBV and earnings potential, especially given the Fed's tailwinds.

If you're willing to tolerate the volatility, AGNC is a no-brainer below $11. But don't ignore the risks-monitor the Fed's policy path and AGNC's leverage closely. This isn't a buy-and-forget stock; it's a tactical bet on the Fed's next move.