Deposit Funding Compass

Deposit Funding Compass Week of January 5, 2024

Juxtapose data points have somewhat confused traders this morning as a sharp sell off in rates following the non-farm payroll report has been tapered by a dismal ISM release. US job growth picked up in December(+216k) and wage gains exceeded expectations, diminishing prospects for an imminent Federal Reserve interest-rate cut initially. Expectations for a March cut were…
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Deposit Funding Compass Week of December 28, 2023

We’d like to highlight some funding specials that are somewhat speculative given they are 10-20 BPS lower than what is currently outstanding on the same terms, however, with a lack of product overall and continued strong demand, we feel that we can move appreciable volume at the stated rates. We would be willing to firm…
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Deposit Funding Compass Week of December 20, 2023

Rates are down considerably week over week and at their lowest levels since mid-summer.  CD issuance had a moderate uptick late last week/early this week but with limited days remaining in the month and two holidays to account for it looks prudent to begin focusing on 2024 business. Please see our current funding opportunities the…
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Deposit Funding Compass Week of December 14, 2023

Market Commentary: The FOMC left its policy rate unchanged yesterday at 5.25%-5.50%, as expected, but the totality of Fed communication was dovish enough to spur a significant bond rally throughout the afternoon. 2s fell almost 30bp by the end of trading, 5s fell below 4.00% for the first time since July, and 10s fell to…
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Deposit Funding Compass Week of December 6, 2023

The ADP employment report showed that 103,000 jobs were added in the private sector in November. This was below the consensus expectation for today’s report and also below the consensus expectation for Friday’s BLS report (headline: 187k, private: 160k). Rate markets priced for deep cuts in early 2024 may get a shock next week if…
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Deposit Funding Compass Week of November 8, 2023

The bond market is betting on a “dovish pivot” for the seventh time since the Fed embarked on its current tightening cycle. Treasury yields turned sharply lower as bonds rallied in the wake of last week’s FOMC meeting, at which Chair Powell hinted that the current rate-hike cycle may be near an end. Markets now…
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Deposit Funding Compass Week of November 2, 2023

Federal Reserve Chair Jerome Powell hinted the US central bank may now be finished with the most aggressive tightening cycle in four decades after it held off on raising interest rates for a second consecutive policy meeting. Federal Open Market Committee left its benchmark rate unchanged Wednesday in a range of 5.25% to 5.5%. Officials…
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Deposit Funding Compass Week of October 25, 2023

With the Federal Reserve shrinking its portfolio of government securities, Treasuries experienced their worst sell off on longer terms in nearly four decades. With 10-year yields surging past 5% for the first time in 2007 this week the Fed may come under pressure, as ever-increasing borrowing costs bring with it the risk of a harder…
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Deposit Funding Compass Week of October 18, 2023

Treasuries tumbled, driving two-year yields to a 17-year high, after a surprisingly large jump in retail sales last month increased speculation that the Federal Reserve will raise interest rates again. Yields rose across the maturity spectrum led by the five-year, which rose as much as 17 basis points to the highest level since 2007. The…
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Deposit Funding Compass Week of October 12, 2023

US consumer prices advanced at a brisk pace for a second month in September, underscoring the Federal Reserve’s intent to keep interest rates higher for longer. Core consumer price index, which excludes food and energy costs, increased 0.3% last month. Economists favor the core gauge as a better indicator of underlying inflation than the overall…
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