CU 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 landing for the economy. Treasury yields retraced about half of their declines from multiyear highs reached earlier in the week amid expectations that auction size increases will be announced next week. The selloff pushed the yield on five-year notes to as high as 4.99% last week.

The deposit market continues to see high demand from buyers across the yield curve, as the flattening of that curve has increased in attractiveness of mid to longer terms. If you are considering bringing on additional deposits, we would encourage acting sooner than later as there is an expectation the costs of funds could continue to move higher in the coming months. In particular, callable Share Certificates offer long term stability while retaining short term flexibility. If you have any interest in or questions about the current deposit market, please feel free to reach out to us at any time.

Additional Resources

Deposit Funding Compass Week of April 3, 2024

Bond Market participants are projecting fewer rate cuts than the Feds median forecast for the first time this year. Fed fund futures are forecasting about 65 basis points of rate reductions in 2024, compared to the 75 basis points signaled by the median estimate of projections released following the Fed’s meeting. The benchmark 10-year note…
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CU Funding Compass Week of April 3, 2024

Bond Market participants are projecting fewer rate cuts than the Feds median forecast for the first time this year. Fed fund futures are forecasting about 65 basis points of rate reductions in 2024, compared to the 75 basis points signaled by the median estimate of projections released following the Fed’s meeting. The benchmark 10-year note…
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Deposit Funding Compass Week of March 26, 2024

Open transactions for what was ultimately a rather muted quarter end have begun to close and issuance for early April has assumed a moderate pace.  Treasuries steadily march to the upside with sentiment regarding a June rate cut beginning to shift from what was once a foregone conclusion to increasingly unlikely. What this means for…
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CU Funding Compass Week of March 26, 2024

Open transactions for what was ultimately a rather muted quarter end have begun to close and issuance for early April has assumed a moderate pace.  Treasuries steadily march to the upside with sentiment regarding a June rate cut beginning to shift from what was once a foregone conclusion to increasingly unlikely. What this means for…
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CU Funding Compass Week of March 21, 2024

Traders were prepared for the FOMC to push back against their optimism over interest-rate cuts,  and when they didn’t, buy signals flashed across Wall Street.  Global stocks and bonds extended gains on Thursday after Fed policymakers kept rates on hold and continued to pencil in three quarter-point cuts this year. While Powell emphasized the US central bank was…
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Deposit Funding Compass Week of March 21, 2024

Traders were prepared for the FOMC to push back against their optimism over interest-rate cuts,  and when they didn’t, buy signals flashed across Wall Street.  Global stocks and bonds extended gains on Thursday after Fed policymakers kept rates on hold and continued to pencil in three quarter-point cuts this year. While Powell emphasized the US central bank was…
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Deposit Funding Compass Week of March 14, 2024

Prices paid to US producers rose in February by the most in six months, driven by higher fuel and food costs that add to evidence inflation remains elevated.  The report showed a rise of 1.6% from a year earlier, the largest annual advance since September.  The February reading of the PCE, the Fed’s preferred inflation…
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Deposit Funding Compass Week of March 6, 2024

Fed Chair Jerome Powell reiterated to lawmakers that the US central bank is in no rush to cut interest rates until policymakers are convinced they have won their battle over inflation. In prepared testimony to a House panel Wednesday, the Fed chief said it will likely be appropriate to begin lower borrowing costs “at some…
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CU Funding Compass Week of March 6, 2024

Fed Chair Jerome Powell reiterated to lawmakers that the US central bank is in no rush to cut interest rates until policymakers are convinced they have won their battle over inflation. In prepared testimony to a House panel Wednesday, the Fed chief said it will likely be appropriate to begin lower borrowing costs “at some…
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Deposit Funding Compass Week of February 29, 2024

The US economy expanded at a slightly slower rate at the end of last year as a downward revision to inventories masked stronger household spending and investment. GDP rose at a revised 3.2% annualized pace in the fourth quarter, compared with a prior estimate of 3.3%. Consumer spending advanced at a 3% rate. Inflation was revised higher. The Federal Reserve’s…
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