September 7, 2023
Applications for US unemployment benefits fell to the lowest level since February, underscoring businesses’ reluctance to let go of workers. Initial unemployment claims decreased by 13,000 to 216,000 in the week ended Sept. 2, Labor Department data showed Thursday. The figure was lower than all forecasts. Fed Funds futures have priced in a pause from the FOMC at this months meeting but expect nearly a 50% chance we will see an additional hike at the beginning of November.
Banks have begun to ramp up their quarter end issuance and spreads demanded by investors have begun to widen with a deluge of new deals coming to market. We anticipate these conditions persist through the end of September and supply will only exacerbate the cost of issuance. Anticipating deposit needs and coming to market even just a week or two early can produce considerable cost savings.
Additional Resources
Deposit 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…
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…
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…
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…
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…
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…
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…
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…
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…
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…