Deposit Funding Compass Week of August 10, 2023

A key measure of US consumer prices rose only modestly for a second month, bolstering hopes that the Federal Reserve can tame inflation without sparking a recession. The core consumer price index, which excludes often-volatile food and energy costs, rose 0.2% for a second month. That marked the smallest back-to-back gains in more than two years. After hiking benchmark interest rates 11 times since March 2022, central bank officials are widely expected to take a break in September.

For anyone considering bringing on deposits we would like to highlight our callable offerings. Issuing a callable enables extending the term of the deposit while retaining the flexibility that comes with shorter terms. Only the bank has the option to execute the call option, and there are no penalties attached if you decide to exercise the option. Longer lockout call durations allow for significant cost savings to shorter locks, allowing an issuer to follow the inverted shape of the yield curve.

If you are interested in extending your duration but would also like to take full advantage of the inverted yield curve we have long term bullet funding available at what are very tight spreads to Treasuries and have been seeing a lot of interest from buyers in this market.