Deposit Funding Compass Week of July 27, 2023

The 25-basis-point hike at the July FOMC meeting — to a range of 5.25%-5.50% — was as expected. While the lack of substantive changes to the policy statement suggests the majority of officials still want to keep the door open for another rate hike. Chair Jerome Powell’s somewhat dovish performance at the post-meeting news conference suggests a willingness to skip a hike at the September meeting, provided inflation data continues to be soft. Fed policymakers thoroughly telegraphed the 25-basis-point rate hike they delivered at the July meeting, and most FOMC participants probably still think one more 25-bp hike is needed to reach a sufficiently restrictively stance, but they may feel less strongly about that projection than they did in June.

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CU 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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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…
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CU 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 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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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…
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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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CU 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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CU 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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