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....
The Bank of England kept its key interest rate on hold at 4.25% during its Thursday meeting, with economists expecting the central bank to wait until August before it cuts again. Six out of nine of the BOE's monetary policy committee opted to hold rates with three opting for a 25-basis-points cut. "Underlying UK GDP [gross domestic product] growth appears to have remained weak, and the labour market has continued to loosen, leading to clearer signs that a margin of slack has opened up over time," the central bank said in a statement. "Measures of pay growth have continued to moderate and,...
The Swiss National Bank (SNB) cut its policy rate by 25 bps to 0% in June 2025, as expected, setting borrowing costs at zero for the first time since negative rates in late 2022. The move came amid easing inflationary pressures and a weakening global economic outlook. Consumer prices in Switzerland fell by 0.1% in May, marking the first decline in four years, mainly driven by lower prices in tourism and oil products. The SNB now projects average inflation at 0.2% for 2025, 0.5% for 2026, and 0.7% for 2027. Swiss GDP also posted strong growth in the first quarter of 2025, partly supported...
The United States (US) Federal Reserve (Fed) announced on Wednesday that it left the policy rate, federal funds rate, unchanged at the range of 4.25%-4.5% following the June policy meeting. This decision came in line with the market expectation. Source: Fxstreet
Markets expect the Fed to keep rates on hold today. Recent data has surprised in a dovish direction, but projections and the dot plot will shift more hawkish. The ‘hard' data from the projections likely gives a better signal of the Fed's rate trajectory than the ‘soft' data from Powell's press conference, ABN AMRO's economist Rogier Quaedvlieg reports. Fed to hold rates, but dot plot set for hawkish shift "Tonight the Fed will keep rates on hold. In the press conference, Powell will likely repeat the messaging of last time: they will consider the totality of the Trump administration's...
Bank of Japan (BoJ) Governor Kazuo Ueda reaffirmed the central bank's commitment to raising interest rates if underlying inflation nears its 2% target. While core consumer inflation has stayed above 2% for three years, demand-driven pressures remain subdued. Ueda told parliament the BoJ is keeping real interest rates negative to support stable, sustained inflation. "Once we have more conviction that underlying inflation will approach or hover around 2%, we will continue to raise rates," he said. The BoJ ended its decade-long stimulus last year, lifting short-term rates to 0.5% in January as...
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...