Conflicting signals from the Federal Reserve on the timing and magnitude of U.S. interest rate cuts have accelerated hedging flows into swaptions and derivatives tied to overnight rates, with investors seeking protection against heightened policy uncertainty. Short-term volatility --specifically three-months and under -- on longer-dated swaptions such as those on 10-year and 30-year swaps has picked up following a prolonged period of compression. Swaptions, which are options on interest rate swaps, are one segment of the more than $600 trillion over-the-counter rate derivatives market....
Global stocks fell and long-dated bond yields in Europe hit multiyear highs on Tuesday as investors grew increasingly worried about the state of finances in countries around the world, while the dollar gained, and gold touched a fresh record high. A divided U.S. appeals court ruled on Friday that most of President Donald Trump's tariffs are illegal, although the court allowed for the tariffs to stay in place until October 14 to give the administration a chance to file an appeal with the Supreme Court. U.S. manufacturing also contracted for a sixth straight month in August as factories...
Nearly 600 economists signed an open letter Tuesday warning that President Donald Trump's attempt to fire Federal Reserve Governor Lisa Cook threatens the central bank's independence and erodes trust in a key pillar of the U.S. financial system. "Good economic policy requires credible monetary institutions. Credible monetary institutions, in turn, require the independence of the Federal Reserve," they wrote in the letter addressed to Trump, members of Congress and the American public. "We stand with Governor Cook and with the institutional safeguards that have long underpinned American...
Markets are kicking around the idea of a Federal Reserve rate cut in September, but Morgan Stanley isn't sure, warning that the odds may be closer to 50-50 despite widespread expectations. Strong economic indicators including solid GDP growth, healthy financial conditions, and low volatility stand in the way of a clear case for easing, the bank said in a recent report. Nominal GDP growth remains robust at over 5%, unemployment holds steady at 4.2%, and retail sales continue surpassing expectations, reflecting an economy far from needing stimulus, Morgan Stanley's economists said. "It cannot...
New York Federal Reserve Bank President John Williams indicated on Wednesday that interest rates could decrease at some point, but emphasized that upcoming economic data will determine if a rate cut is appropriate at the September 16-17 meeting. "Every meeting is, from my perspective, live" for a change in the benchmark policy rate, Williams stated during a CNBC interview. He added that "risks are more in balance. We are going to just have to see how the data play out." Before the next Federal Reserve meeting, policymakers will receive fresh jobs data and new consumer price inflation...
Federal Reserve Governor Lisa Cook will file a lawsuit to prevent President Donald Trump from firing her, a lawyer for the embattled central bank official said on Tuesday, kicking off what could be a protracted legal fight over the White House's effort to shape U.S. monetary policy. "His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action," Cook's lawyer, prominent Washington attorney Abbe Lowell, said in a statement. The statement was issued a day after Trump said he would fire Cook, the...
President Donald Trump said he would fire Lisa Cook from the Federal Reserve's Board of Governors if she does not resign her post over mortgage-fraud accusations from a top...
The Reserve Bank of Australia (RBA) maintained its cash rate at 4.1% during its April meeting, holding borrowing costs unchanged after slashing 25 bps in the February meeting, aligning with market...