Deposit 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 re-acceleration 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, CD issuance is fast and furious with hundreds of banks 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.

Additional Resources

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 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…
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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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Deposit 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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Deposit Funding Compass Week of May 2, 2024

In a widely expected move, the U.S. central bank kept its benchmark short-term borrowing rate in a targeted range between 5.25%-5.50%. The federal funds rate has been at that level since July 2023, when the Fed last hiked and took the range to its highest level in more than two decades. The rate-setting Federal Open…
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Deposit Funding Compass Week of April 24, 2024

Treasuries hold small losses during US morning ahead of record $70 billion 5-year note sale at 1pm EST. Much of this week’s focus will be on data, particularly GDP tomorrow, along with PCE on Friday. If the PCE report on Friday comes in hot we expect to see a reaction in our market, with rates…
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Deposit Funding Compass Week of April 17, 2024

Federal Reserve Chair Jerome Powell is making waves for his contemporaries around the world as the prospect of higher-for-longer US interest rates reduces room for policy easing elsewhere. Powell on Tuesday signaled the Fed will wait longer than previously anticipated to cut borrowing costs following a series of surprisingly high inflation readings — marking a…
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CU Funding Compass Week of April 17, 2024

Federal Reserve Chair Jerome Powell is making waves for his contemporaries around the world as the prospect of higher-for-longer US interest rates reduces room for policy easing elsewhere. Powell on Tuesday signaled the Fed will wait longer than previously anticipated to cut borrowing costs following a series of surprisingly high inflation readings — marking a…
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Deposit Funding Compass Week of April 10, 2024

US inflation topped forecasts for a third straight month (Core CPI + 0.4% MoM), ushering a fresh wave of price pressures that will likely delay any Federal Reserve interest-rate cuts until later in the year. Treasury yields and the dollar jumped while S&P 500 index futures tumbled. The 10yr UST yield traded through the psychological…
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