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 expect 92 basis points of rate cuts next year, compared with Fed officials’ estimate of a half a point of easing for 2024. Last week saw the biggest weekly decline in the 10-year real yield of 2023 so far. Treasury auction cycle resumes with $40b 10-year note sale at 1pm, following good reception for 3-year note Tuesday.

CD levels sometimes lacking the dynamism or depth of market of assets like treasuries tend to take a bit longer to calibrate to dramatic shifts in level, occasionally overshooting to the downside before settling into a range. Our willingness to be first to market with freshly adjusted levels can often yield value for clients as supply tends to be light following abrupt rally’s and spreads compress before market activity increases and rates start to widen again. This week’s run are indications of just that, aggressively adjusted rates reflecting last week’s move in treasuries. Some levels may be more speculative in nature as its unclear where the dust will settle with regard to volume of issuance as year-end approaches but there is potential for considerable savings if banks are willing to take a flexible approach and see what buyers are willing to tolerate.

Please see today’s opportunities. Feel free to email or call the CD desk with any orders. Availability of term and dollar volume could be limited based on supply and changes in the market. Orders will be taken on a first come, first served basis.

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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