CU Funding Compass Week of September 13, 2023

Core US inflation, which excludes food and energy costs, ran at a faster-than-expected monthly pace in August, leaving the door open for additional interest-rate hikes from the Federal Reserve. The advance was +0.3% from July, the first acceleration in six months. The report adds to concerns that the renewed momentum in the economy is reigniting price pressures. While Fed officials have been growing more optimistic they can tame inflation without a recession, a reacceleration in price growth could force them to push interest rates even higher, with the risk of sparking a downturn in the process.

As is the trend in recent months at the end of a quarter, Share Certificate issuance is fast and furious with hundreds of credit unions entering the market across the curve with the typical points of concentration being 24mo’s and in. Our guidance for many of the institutions we work with, contingent upon urgency, has been to come out strong with levels that will complete the raise in a timely fashion or risk getting caught in a situation of chasing rates higher heading in to the second half of the month.

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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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