CU 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 expect 92 basis points of rate cuts next year, compared with Fed officials’ estimate of a half a point of easing for 2024. Last week saw the biggest weekly decline in the 10-year real yield of 2023 so far. Treasury auction cycle resumes with $40b 10-year note sale at 1pm, following good reception for 3-year note Tuesday.

Share Certificate levels sometimes lacking the dynamism or depth of market of assets like treasuries tend to take a bit longer to calibrate to dramatic shifts in level, occasionally overshooting to the downside before settling into a range. Our willingness to be first to market with freshly adjusted levels can often yield value for clients as supply tends to be light following abrupt rally’s and spreads compress before market activity increases and rates start to widen again. This week’s run are indications of just that, aggressively adjusted rates reflecting last week’s move in treasuries. Some levels may be more speculative in nature as its unclear where the dust will settle with regard to volume of issuance as year-end approaches but there is potential for considerable savings if credit unions are willing to take a flexible approach and see what buyers are willing to tolerate.

Please see today’s opportunities. Feel free to email or call the Share Certificate desk with any orders. Availability of term and dollar volume could be limited based on supply and changes in the market. Orders will be taken on a first come, first served basis.

Additional Resources

CU Funding Compass Week of June 20, 2024

The bond market has recently seen signs of improvement, with the benchmark 10-year Treasury note yield recently giving back a chunk of its 2024 gains. Investors are betting that cooling US prices will convince the Federal Reserve to cut interest rates sooner and by more than officials have signaled, effectively putting a lid on how…
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Deposit Funding Compass Week of June 20, 2024

The bond market has recently seen signs of improvement, with the benchmark 10-year Treasury note yield recently giving back a chunk of its 2024 gains. Investors are betting that cooling US prices will convince the Federal Reserve to cut interest rates sooner and by more than officials have signaled, effectively putting a lid on how high Treasury…
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Deposit Funding Compass Week of June 13, 2024

Policymakers kept rates steady at a more than two-decade high on Wednesday and dialed back their forecasts to pencil in just one quarter-point rate cut by year end, about half of what markets are pricing in. This morning’s PPI report had already delivered what traders were waiting for, the key measure of inflation cooled to…
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CU Funding Compass Week of June 13, 2024

Policymakers kept rates steady at a more than two-decade high on Wednesday and dialed back their forecasts to pencil in just one quarter-point rate cut by year end, about half of what markets are pricing in. This morning’s PPI report had already delivered what traders were waiting for, the key measure of inflation cooled to…
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CU Funding Compass Week of June 6, 2024

Bonds fell yesterday as traders weighed mixed economic data for clues on the Federal Reserve’s next steps. Earlier Wednesday, a private payrolls reading highlighted that hiring at US companies grew at the slowest pace since the start of the year. Traders are now gearing up for Friday’s monthly payrolls report, which is expected to show…
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Deposit Funding Compass Week of June 6, 2024

Bonds fell yesterday as traders weighed mixed economic data for clues on the Federal Reserve’s next steps. Earlier Wednesday, a private payrolls reading highlighted that hiring at US companies grew at the slowest pace since the start of the year. Traders are now gearing up for Friday’s monthly payrolls report, which is expected to show…
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Deposit Funding Compass Week of May 31, 2024

Inflation rose roughly as expected in April, with markets paying close attention to when interest rates might start coming down, according to a measure released Friday that is followed closely by the Federal Reserve. The core reading for the personal consumption expenditures price index, which excludes food and energy costs, rose 0.2% in April. That…
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CU Funding Compass Week of May 22, 2024

Treasury yields rise as investors digest Fed speaker comments. Several Fed officials urged patience when it comes to rate cuts as inflation remains above the central banks 2% target range. Fed Governor Christopher Wallace said he would like to see more good data on the inflation front before lowering rates. Share Certificate issuance has increased…
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Deposit Funding Compass Week of May 22, 2024

Treasury yields rise as investors digest Fed speaker comments. Several Fed officials urged patience when it comes to rate cuts as inflation remains above the central banks 2% target range. Fed Governor Christopher Wallace said he would like to see more good data on the inflation front before lowering rates. CD issuance has increased roughly…
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Deposit Funding Compass Week of May 16, 2024

A measure of underlying US inflation cooled in April for the first time in six months, a small step in the right direction for Federal Reserve officials looking to start cutting interest rates this year. The core consumer price index, which excludes food and energy costs, increased 0.3% from March, according to government data out…
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