The increase in short interest for NLY suggests that investors are becoming more bearish on the stock, potentially leading to downward pressure on its price in the short term. However, being below the peer average indicates that it is not as heavily shorted as others in its sector, which might mitigate some negative impact. The short-term price direction is likely to be influenced by this bearish sentiment, although the actual movement will depend on broader market conditions and company-specific news.