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 25% week over week with maturities remaining concentrated inside of 18mos. The competition for banks to have dollars allocated to their offerings is becoming fierce and we are seeing rates pushed up from an abundance of supply. We have seen levels go stale in a day, if not hours, via new market entrants paying coupons more attractive to investors. Further out the curve levels are buoyed by large money center banks but there remains enough room for some opportunistic prints.

If you plan on some offerings for next month, it may be beneficial to get started sooner than later as June can historically be a very busy month for issuance. This is especially the case if you have any issues maturing, as we are currently issuing new settlements for the second week of June.

If you are looking for deposits to settle in May we would like to highlight to the following structure:

1 Year – 5.44% All-in Cost – $1-50MM Firm* – Settle May 31

*Depending on the institution

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 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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CU Funding Compass Week of May 8, 2024

Economic data is taking a bit of a breather this week after the onslaught of last week, culminating in what can be described as “bad news is good news” with the weak jobs report.  Yields retreated from this year’s high water mark under the hope that a softening labor market could still spur the Fed…
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