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Fed retreat from MBS market sparks short-term uncertainty

What happens when the Federal Reserve begins pulling back in a serious way from the mortgage-backed securities (MBS) market that it has helped to prop…



Federal Reserve in Washington, D.C.

What happens when the Federal Reserve begins pulling back in a serious way from the mortgage-backed securities (MBS) market that it has helped to prop up through billions of dollars in bond purchases since the start of the pandemic in 2020 — to the point where it now holds a $2.7 trillion agency MBS portfolio?

In short, uncertainty is the forecast, according to industry experts who weighed in on the subject. 

Long-term, however, they agree the market will work through the changes and likely wind up better off, assuming the Fed’s so-called quantitative tightening strategy manages to tame runaway inflation and chases off its close cousin, a recession.

“It doesn’t make sense to start raising interest rates [to fight inflation] without running off their MBS portfolio,” said Laurie Goodman, vice president for housing finance policy and the founder of the Housing Finance Policy Center at the Urban Institute

How that policy of shrinking the Fed’s MBS holdings will ultimately shake out short-term in the mortgage origination and secondary markets as it is played out, she said, is simply not knowable at this point, however.

“It’s just hard to tell exactly what will happen because there’s so many currents,” Goodman explained. “You don’t know what investor demand is going to be. At the end of the day, though, the product [agency MBS] will be absorbed at a price.”

Ray Perryman, president and CEO of The Perryman Group, an economic research and analysis firm based in Texas, added that the Federal Reserve must act now to get inflation under control. He, too, agrees that there are “too many moving parts” to predict with any degree of certainty what will happen to the agency MBS market, the origination market, or the private label securities (PLS) market in the short-term as rates continue to rise and the Fed pulls back further from MBS purchases.

“Although we are not facing the same structural issues as the late 1970s and early 1980s, prices are rising at the fastest rate in decades and unemployment is trending below 4%,” Perryman said. “There also seems to be adequate momentum to sustain growth with a more restrictive policy, although that patter will have to be monitored very carefully.  

“Of necessity, this [effort to battle inflation] will involve actions such as increasing baseline interest rates (likely in half-point increments) and reducing the Fed’s portfolio of mortgage backed (and other) securities. “

The Federal Reserve, as part of its inflation-busting strategy, ceased making new purchases of agency mortgage-backed securities, or MBS, in early March.  Its quantitative tightening efforts also included a quarter-point boost in its benchmark interest rate in March, with at least six more bumps planned yet as the year progresses.

The Fed’s agency MBS holdings now total about $2.7 trillion and, so far, it is continuing to replace maturing assets in that portfolio as they run off the books. 

That’s about to end, however. 

Notes from the Fed’s March gathering of its Federal Open Markets Committee (FOMC) indicate that there is consensus around a plan to cease replacing up to $35 billion of maturing MBS assets each month. For some context, in February, as the Fed was winding down its net new purchases of MBS at a pace of $10 billion a month, its gross monthly agency MBS purchases totaled about $60 billion, or 31.3% of total agency gross issuance for the month. 

The Feds existing $2.7 trillion portfolio represented about 25% of the total $10.7 trillion in agency MBS issuance outstanding as of year-end 2021, according to figures from the Securities Industry and Financial Markets Association, or SIFMA.

Cutting another $35 billion from the Fed’s monthly MBS purchase tally will create a significant amount of new supply in the market and likely further increase pressure on interest rates, which could be amplified by other potential world events, explained Lawrence Yun, chief economist for the National Association of Realtors.

“Directionally, it means higher mortgage rates,” Yun said. “… If China reduces its holdings of U.S. government bonds or GSE-related [government-sponsored enterprise] securities, then interest rates will rise even further. 

“The soaring federal deficit requires even more buyers of bonds, and some government bond sales may make it more difficult to issue MBS securities, unless with higher interest rates.” 

The Fed, however, appears resolute in its path. The cost of doing nothing on the MBS front is too high.

“All participants agreed that elevated inflation and tight labor market conditions warranted commencement of balance sheet runoff at a coming meeting,” the FOMC March meeting notes state. “Participants generally agreed that monthly caps of … about $35 billion for agency MBS would likely be appropriate. Participants also generally agreed that the caps could be phased in over a period of three months or modestly longer if market conditions warrant.”

When new MBS runoff-replacement contraction program will begin is not clear at this point. The FOMC’s next meeting is in early May.

The ultimate impact on the origination and private label securities markets, and the broader housing market, of losing some $35 billion in monthly agency MBS buying power could be offset if other investors step up to the plate to fill the void. 

Some industry experts, however, expect the Fed’s move to significantly decrease its reinvestment in agency MBS will likely create more short-term disruption in the nation’s housing market. It’s a market already under siege from a hawkish Fed policy that has sparked a sharp rise in interest rates, up 1.5 percentage points over the past three months — with the average 30-year fixed mortgage rate now over the 5% threshold, according to recent rate lock figures from Black Knight‘s Optimal Blue OBMMI.

“As the Fed pursues quantitative tightening (the steady undoing of quantitative easing), more private bond investors have to step up to buy MBS securities of GSE and private labels, Yung said. “The soaring federal deficit requires even more buyers of bonds, and some government bond sales may make it more difficult to issue MBS securities, unless with higher interest rates. 

“All in all, the impact is likely to be the 30-year fixed-rate mortgage reaching 5.2 to 5.5% by the end of the year. Some homebuyers may get slight relief in taking the 5-year ARM at around 100 basis points below the 30-year rate.”

Mortgage-data analytics firm Recursion recently published an assessment of the major agency MBS investment sectors that might step in to replace the central bank’s purchasing power. One of those sectors is the agency MBS issuers themselves — the GSEs Fannie Mae and Freddie Mac

Each agency has a $225 billion regulatory cap on the size of its asset portfolio, however, which includes mortgage loans and MBS holdings. 

As of January 2022, Fannie’s asset portfolio stood at $108.5 billion and Freddie’s at $102 billion, according to a report from the Urban Institute’s Housing Finance Policy Center. The GSEs’ combined share of total MBS purchases has declined from 11.2% in 2009 to 1.9% today, according to Recursion, with little room to expand under the current caps.

“This occurred under the auspices of the terms of conservatorship and subsequent amendments to the Preferred Stock Purchase Agreements (PSPAs) that govern the financial aspects of their relationship with Treasury and FHFA [the Federal Housing Finance Agency, which oversees the GSEs],” Recursion notes in its report, posted as a blog on its website. “It is possible that the caps will rise temporarily … but there is virtually no chance that this will account for more than a tiny amount of the upcoming decline in Fed [MBS] holdings in this administration.” 

An April 2021 Congressional Research Service report notes: “The current … cap on the GSEs’ asset portfolios (resulting from the PSPAs) may limit their ability to buy and sell MBSs at the volumes necessary to influence market pricing.”

Recursion also is skeptical about the prospects for the other major investment sectors to step in and fill the gap being opened by the Fed’s plan to withdraw further from the agency MBS market. Those investor sectors, according to Recursion, and their estimated share of overall agency MBS purchases as of the end of last year are as follows: commercial banks, roughly 34%; money market and pension funds, 5% to 6%; and foreign investors, 11% to 12.5%. 

Making up the balance of the agency MBS purchaser sector are Life insurance companies, real estate investment trusts, credit unions, broker/dealers, state and local governments, households and nonprofits, Recursion notes.

“The most important private market segment of agency MBS holdings is commercial banks,” the Recursion report states. “This is the only segment whose share in Q4 2021 was bigger than the Fed’s.”

Still, the banks tend to mirror Fed patterns in their MBS purchasing activity, Recursion notes, therefore “the outlook for bank activity in the new monetary policy regime of a shrinking Fed balance sheet is highly uncertain.” 

“Looking across these major asset classes, the most likely purchasers of MBS are real money investors [money market and pension funds], but it is far from certain that they will make up for falling holdings on the part of the Fed and commercial banks,” the Recursion report continues. “[However], there is little reason for ‘real money’ investors such as these to catch a falling knife while the new policy regime unfolds.

“…Investors and analysts cannot simply assume that the handoff from the central bank to private investors will be smooth.”

So, we are left with some glimmer of hope of a market adjustment, but mainly we again find uncertainty. Still, there are some market observers who see a potential upside to the shrinking Fed agency MBS balance sheet that will come from outside the agency MBS market. Michael Bright, CEO of the Structured Finance Association, said the winding down of the Fed’s MBS portfolio will result in higher rates across all sectors of the industry, including the private label market.

“But on a relative basis, the economics are still favoring some pickup in PLS versus agency execution,” he added. “This dynamic will continue to be driven by product decisions and loan-level pricing adjustments from the FHFA and the GSEs [that it oversees], which have been favorable to PLS execution lately.”

Some evidence of the accuracy of Bright’s assessment can be found in the bevy of recent PLS deals secured by agency-eligible investment property mortgages. A total of 22 securitization transactions backed by investment properties valued in total at $10.1 billion have found their way into the PLS channel so far this year, and at least 14 of those deals have been secured, in part or in whole, by agency-eligible mortgages on investment properties — with five of those deals scheduled to close this month. 

Those numbers, based on deals tracked by Kroll Bond Rating Agency, do seem to support Bright’s contention that the PLS market does offer favorable pricing versus the agency MBS pipeline — at least for securitizations involving investment properties.

“We are starting to see some indication of a resurgence in investor-loan issuance backed by agency-eligible loans,” states a recent report from digital-mortgage exchange and loan aggregator MAXEX. “Many of these transactions continue to have some seasoning with newer originations starting to show up as liquidity away from the agencies for certain loans with specific criteria.

“We have also seen an increase in the number of second-home loans being traded through the exchange to avoid the LLPA increase instituted by the FHFA for second-home and high-balance loans delivered to the agencies after April 1. We’ll continue to watch this trend as it develops.”

Goodman added that there also exist other investment channels that are now off the radar of the MBS market, but which could yet come into play as market dynamics shift. In that sense, uncertainty doesn’t always turn out long-term to be a negative, especially in a resilient market.

“You also always have portfolio managers that can shift from corporates into mortgages,” Goodman said. “They could sell their corporate bonds and buy mortgage-backed securities if that made sense. 

“So, you have money out there that can come in that is not necessarily in the [MBS] sector now. … We just need some stability in the market and then people will have to reevaluate where yields are on different asset classes and sort of redo their ideas of relative value.”

The post Fed retreat from MBS market sparks short-term uncertainty appeared first on HousingWire.

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Who Owns The Most Satellites?

Who Owns The Most Satellites?

Nearly 7,000 satellites orbit the Earth, serving vital functions such as communication, navigation, and scientific…



Who Owns The Most Satellites?

Nearly 7,000 satellites orbit the Earth, serving vital functions such as communication, navigation, and scientific research.

In 2022 alone, more than 150 launches took place, sending new instruments into space, with many more expected over the next decade.

But who owns these objects? In this graphic, Visual Capitalist's Bruno Venditti and Miranda Smith utilize data from the Union of Concerned Scientists to highlight the leaders in satellite technology.

SpaceX’s Dominance in Space

SpaceX, led by Elon Musk, is unquestionably the industry leader, currently operating the largest fleet of satellites in orbit—about 50% of the global total.

The company has already completed 62 missions this year, surpassing any other company or nation, and operates thousands of internet-beaming Starlink spacecraft that provide global internet connectivity.

Starlink customers receive a small satellite dish that self-orients itself to align with Starlink’s low-Earth-orbit satellites.

Percentages may not add to 100 due to rounding.

In second place is a lesser-known company, British OneWeb Satellites. The company, headquartered in London, counts the UK government among its investors and provides high-speed internet services to governments, businesses, and communities.

Like many other satellite operators, OneWeb relies on SpaceX to launch its satellites.

Despite Starlink’s dominance in the industry, the company is set to face intense competition in the coming years. Amazon’s Project Kuiper plans to deploy 3,236 satellites by 2029 to compete with SpaceX’s network. The first of the fleet could launch as early as 2024.

The Rise of China’s Space Program

After the top private companies, governments also own a significant portion of satellites orbiting the Earth. The U.S. remains the leader in total satellites, when adding those owned by both companies and government agencies together.

American expenditures on space programs reached $62 billion in 2022, five times more than the second one, China.

China, however, has sped up its space program over the last 20 years and currently has the highest number of satellites in orbit belonging directly to government agencies. Most of these are used for Earth observation, communications, defense, and technology development.

Satellite Demand to Rise Over the Decade

Despite the internet being taken for granted in major metropolitan areas and developed countries, one out of every three people worldwide has never used the web.

Furthermore, the increasing demand for data and the emergence of new, more cost-effective satellite technologies are expected to present significant opportunities for private space companies.

In this context, satellite demand is projected to quadruple over the next decade.

Tyler Durden Thu, 09/28/2023 - 19:20

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NIH Doctor Flagged Wuhan Virus Lab Safety Problems As Early As 2017

NIH Doctor Flagged Wuhan Virus Lab Safety Problems As Early As 2017

Authored by Tom Ozimek via The Epoch Times,

A doctor working for the…



NIH Doctor Flagged Wuhan Virus Lab Safety Problems As Early As 2017

Authored by Tom Ozimek via The Epoch Times,

A doctor working for the U.S. government in 2017 visited the China-based virus research facility that may have leaked the pathogen that causes COVID-19, and sounded the alarm on safety issues at the lab earlier than previously reported, according to documents obtained by The Epoch Times.

Dr. Ping Chen, who worked for the National Institute of Allergy and Infectious Diseases (NIAID), visited the Wuhan Institute of Virology (WIV) in October 2017 and prepared a report for her superiors after her visit.

While a version of her report obtained by a Freedom of Information Act (FOIA) request was fully redacted, Sen. Ron Johnson (R-Wis.) and his team were granted an opportunity to carry out an in-camera review of the report that had some of the redactions removed.

“It is clear to me by talking to the technician that certainly there is a need for training support” at the Wuhan lab, Dr. Chen wrote in the report, parts of which were attached to a letter sent by Mr. Johnson to Department of Health and Human Services (HHS) Secretary Xavier Becerra on Sept. 21.

The letter, which was obtained by The Epoch Times, includes fragments of Dr. Chen's report and suggests that HHS and the U.S. National Institutes of Health (NIH) were aware of safety issues at the Wuhan facility as early as October 2017.

The P4 laboratory on the campus of the Wuhan Institute of Virology in Wuhan, Hubei Province, China, on May 13, 2020. (Hector Retamal/AFP via Getty Images)

Earlier reporting based on two State Department cables and correspondence records obtained by Judicial Watch indicate that NIH was made aware of safety problems at the Wuhan lab in 2018, the year after Dr. Chen's report.

“I think the institute would welcome any help and technical support by NIAID,” Dr. Chen wrote in her 2017 report.

Mr. Johnson wrote in his letter to Mr. Becerra that Dr. Chen's 2017 report partially served as the basis for a Jan. 19, 2018, State Department cable that raised safety concerns about the Wuhan virus lab.

Evidence suggests that SARS-CoV-2, the virus that causes COVID-19, leaked from the Wuhan facility before spreading across the world. According to the so-called lab leak theory, the deadly pathogen that caused the pandemic escaped the Chinese facility, which was conducting risky gain-of-function research on bat coronaviruses that was partially funded by U.S. taxpayer dollars.


Mr. Johnson demanded that HHS provide a version of Dr. Chen's 2017 report that contains fewer redactions in order to scrutinize its contents more closely and determine how closely it aligned with the cable.

“In the public FOIA document, HHS redacted Dr. Chen’s entire report claiming that it contains privacy and deliberative information,” Mr. Johnson wrote.

“It seems apparent that the only reason that HHS redacted this information was to hide the report’s contents from the American people. Perhaps HHS did not want the public to fully understand the fact that NIH and NIAID officials were aware of safety concerns at the WIV dating as far back as 2017,” he added.

Mr. Johnson also accused NIH and HHS of obstructing his probe.

"HHS and NIH continue to obstruct my oversight efforts," he wrote. "It is unacceptable that HHS and NIH had Dr. Chen's report in its possession and only provided a slightly less redacted version for my staff to review in camera."

He demanded that HHS provide unredacted copies of Dr. Chen's report and all documents and communications relating to the report and to the Wuhan lab.

Mr. Johnson also asked for Dr. Chen to sit before a congressional panel and testify.

He set an Oct. 5 deadline for HHS to comply with his request.

HHS officials didn't immediately respond to a request by The Epoch Times for comment.

Chinese virologist Shi Zhengli is seen inside the P4 laboratory in Wuhan, China, on Feb. 23, 2017. (Johannes Eisele/AFP via Getty Images)

'Preponderance of Evidence' for Lab Leak

In August 2021, a report by Republican lawmakers noted a "preponderance of evidence" that the virus that caused the COVID-19 pandemic leaked from the Wuhan lab.

Chinese officials have denied the lab leak claim, insisting that the virus made a natural jump from animals to humans.

Rep. Michael McCaul (R-Texas) said in testimony before the Coronavirus Select Subcommittee Republicans that evidence points to a lab leak as the likely origin of the virus, saying that "it's time to completely dismiss the wet market as the source of the outbreak" and "the preponderance of the evidence that it came from the lab is very convincing."

U.S. intelligence agencies later said in a report that a natural origin and a lab leak are both plausible hypotheses but that a lack of evidence makes a definitive conclusion either way impossible.

It's a sentiment echoed by Mr. McCaul in his testimony.

"Unfortunately, we may never know for certain because the Chinese Communist Party went to great lengths to cover up this outbreak," he said. "They detained the doctors in order to silence them. They disappeared journalists. They destroyed lab samples. They hid the fact there was clear evidence of human-to-human transmission. And they have refused to allow a real investigation into the origins."

Wuhan Lab Funding Controversy

The U.S. Agency for International Development awarded a total of $1.1 million to the WIV between October 2009 and May 2019, the agency wrote in a May 2021 letter (pdf) to Rep. Guy Reschenthaler (R-Pa.).

Mr. Reschenthaler alleged that the funding was used for a study that used gain-of-function research to create "a hybrid, man-made virus by inserting a spiked protein from a wild coronavirus into a mouse-adapted SARS-CoV backbone, which could infect human airways."

The agency said the funds were channeled through EcoHealth Alliance and were meant for the purpose of advancing research on critical viruses that could pose a threat to humans. It also denied claims that the money was used for gain-of-function research, which seeks to boost viral lethality for the purpose of studying it.

In June 2022, the House Appropriations Committee approved a ban on sending any further funding to the Wuhan Institute of Virology.

More recently, the NIH quietly removed the WIV from a list of foreign facilities that are eligible to receive U.S. taxpayer funds to conduct animal experiments.

Tyler Durden Thu, 09/28/2023 - 19:40

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Just 3 Nobel Prizes cover all of science – how research is done today poses a challenge for these prestigious awards

The Nobel Prize categories were set up more than a century ago. Since then, science has grown and evolved in unpredictable ways.




Has the Nobel Prize category 'chemistry' morphed into 'biochemistry'? picture alliance via Getty Images

I’ve been primarily an experimental chemist – the kind of person who goes into the laboratory and mixes and stirs chemicals – since the beginning of my career in 1965. Today, and for the past 15 years, I’m a full-time historian of chemistry.

Every October, when the announcements are made of that year’s Nobel laureates, I examine the results as a chemist. And all too often, I share the same response as many of my fellow chemists: “Who are they? And what did they do?”

One reason for that bewilderment – and disappointment – is that in many recent years, none of my “favorites” or those of my fellow chemists will travel to Stockholm. I am not suggesting that these Nobel laureates are undeserving – quite the opposite. Rather, I am questioning whether some of these awards belong within the discipline of chemistry.

Consider some recent Nobel Prizes. In 2020, Emmanuelle Charpentier and Jennifer A. Doudna received the Nobel Prize “for the development of a method for genome editing.” In 2018, Frances H. Arnold received the Nobel Prize “for the directed evolution of enzymes,” which she shared with George P. Smith and Sir Gregory P. Winter “for the phage display of peptides and antibodies.” In 2015, Tomas Lindahl, Paul Modrich and Aziz Sancar received the Nobel Prize “for mechanistic studies of DNA repair.”

All of them received Nobel Prizes in chemistry – not the Nobel Prize in physiology or medicine, even though these achievements seem very clearly situated within the disciplines of medicine and the life sciences. There are many other similar examples.

woman and man in formal dress at awards ceremony
2018 co-laureate Frances Arnold receives her Nobel Prize in chemistry from King Carl XVI Gustaf of Sweden. Henrik Montgomery/AFP via Getty Images

These recent mismatches are even clearer when you look further back in time. Consider the 1962 Nobel Prize awarded to Francis Crick, James Watson and Maurice Wilkins “for their discoveries concerning the molecular structure of nucleic acids and its significance for information transfer in living material.” DNA, of course, is the most famous nucleic acid, and these three scientists were honored for deciphering how its atoms are bonded together and arranged in their three-dimensional double-helix shape.

While the “structure of DNA” most certainly is an achievement in chemistry, the Nobel Assembly at the Karolinska Institute in Stockholm awarded the Nobel Prize in physiology or medicine to Watson, Crick and Wilkins. Clearly, their Nobel achievements have had great consequences in the life sciences, genetics and medicine. Thus awarding them the Nobel Prize for physiology or medicine is quite appropriate.

metal model of structure of DNA molecule double helix
A model of a DNA molecule using some of Watson and Crick’s original metal plates. Science & Society Picture Library via Getty Images

But note the disconnect. The Nobel Prizes in chemistry in 2020, 2018 and 2015 are more life-science- and medicine-oriented than Watson, Crick and Wilkins’ for the structure of DNA. Yet the former were awarded in chemistry, while the latter was in physiology and medicine.

What is going on? What does this trend reveal about the Nobel Foundation and its award strategies in response to the growth of science?

A gradual evolution in the Nobel Prizes

Several years ago, chemist-historian-applied mathematician Guillermo Restrepo and I collaborated to study the relationship of scientific discipline to the Nobel Prize.

Each year, the Nobel Committee for chemistry studies the nominations and proposes the recipients of the Nobel Prize in chemistry to its parent organization, the Royal Swedish Academy of Sciences, which ultimately selects the Nobel laureates in chemistry (and physics).

We found a strong correlation between the disciplines of the members of the committee and the disciplines of the awardees themselves. Over the lifetime of the Nobel Prizes, there has been a continuous increase – from about 10% in the 1910s to 50% into the 2000s – in the percentage of committee members whose research is best identified within the life sciences.

Restrepo and I concluded: As go the expertise, interests and the disciplines of the committee members, so go the disciplines honored by the Nobel Prizes in chemistry. We also concluded that the academy has intentionally included more and more life scientists on their selection committee for chemistry.

Now some perceptive readers might ask, “Is not the discipline of biochemistry just a subdiscipline of chemistry?” The underlying question is, “How does one define the disciplines in science?”

Restrepo and I reasoned that what we term “intellectual territory” defines the boundaries of a discipline. Intellectual territory can be assessed by bibliographic analysis of the scientific literature. We examined the references, often called citations, that are found in scientific publications. These references are where authors of journal articles cite the related research that’s previously been published – often the research they have relied and built on. We chose to study two journals: a chemistry journal named Angewandte Chemie and a life science journal named, rather aptly, Biochemistry.

We found that the articles in Angewandte Chemie mostly cite articles published in other chemistry journals, and the articles in Biochemistry mostly cite articles in biochemistry and life sciences journals. We also found that the reverse is true: Scientific publications that cite Angewandte Chemie articles are mostly in chemistry journals, and publications that cite Biochemistry articles are mostly in biochemistry and life science journals. In other words, chemistry and the life sciences/biochemistry reside in vastly different intellectual territories that don’t tend to overlap much.

Not letting labels be limiting

But now, perhaps a shocker. Many scientists don’t really care how they are classified by others. Scientists care about science.

As I’ve heard Dudley Herschbach, recipient of the 1986 Nobel Prize in chemistry, respond to the oft-asked question of whether he’s an experimental chemist or a theoretical chemist: “The molecules don’t know, nor do they care, do they?”

But scientists, like all human beings, do care about recognition and awards. And so, chemists do mind that the Nobel Prize in chemistry has morphed into the Nobel Prize in chemistry and the life sciences.

black and white head shot of man in early 20th C attire
Jacobus Henricus van ‘t Hoff received the first Nobel Prize in chemistry for 'discovery of the laws of chemical dynamics and osmotic pressure in solutions.’ Universal History Archive/Universal Images Group via Getty Images

Since the Nobel Prizes were first awarded in 1901, the community of scientists and the number of scientific disciplines have grown tremendously. Even today, new disciplines are being created. New journals are appearing. Science is becoming more multidisciplinary and interdisciplinary. Even chemistry as a discipline has grown dramatically, pushing outward its own scholarly boundaries, and chemistry’s achievements continue to be astounding.

The Nobel Prize hasn’t evolved sufficiently with the times. And there just are not enough Nobel Prizes to go around to all the deserving.

I can imagine an additional Nobel Prize for the life sciences. The number of awardees could expand from the current three-per-prize maximum to whatever fits the accomplishment. Nobel Prizes could be awarded posthumously to make up for past serious omissions, an option that was used by the Nobel Foundation for several years and then discontinued.

In truth, the Nobel Foundation has evolved the prizes, but very deliberately and without the major transformations that I think will certainly be required in the future. It will, I believe, eventually break free, figuratively and literally, from the mire of Alfred Nobel’s will and more than a century of distinguished tradition.

When Nobel designed the prizes named after him in the late 1800s and early 1900s, he couldn’t have known that his gift would become a perpetual endowment and have such lasting – indeed, even increasing – significance. Nobel also could not have anticipated the growth of science, nor the fact that over time, some disciplines would fade in importance and new disciplines would evolve.

So far, the extremely competent and highly dedicated scholars at the Nobel Foundation and their partner organizations – and I acknowledge with real appreciation their selfless devotion to the cause – haven’t responded adequately to the growth of the sciences or to the inequities and even incompleteness of past award years. But I have confidence: In time, they will do so.

Jeffrey I. Seeman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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