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....
In a post published on Truth Social on Wednesday (August 20th), US President Donald Trump urged Federal Reserve Governor Lisa Cook to resign, linking to a Bloomberg article titled "Trump Allies Urge Bondi to Investigate Fed's Cook Over Mortgages." "The Director of the Federal Housing Finance Agency (FHA) is urging Attorney General Pam Bondi to investigate Federal Reserve Governor Lisa Cook over two mortgages. This is the latest in a series of steps by the Trump administration to increase legal scrutiny of Democratic figures and officials." (alg) Source: FXstreet
The US Federal Reserve's decision last month to keep interest rates unchanged sparked a dissenting opinion from two leading central bankers who wanted to lower rates to prevent further labor market weakness. The outcome of the two-day meeting on Wednesday could indicate whether their concerns are being shared by other policymakers, potentially reinforcing expectations that borrowing cost reductions could begin next month. Even less than 48 hours after the conclusion of the Federal Open Market Committee (FOMC) meeting on July 29-30, data from the Labor Department appeared to confirm the...
Federal Reserve Chairman Jerome Powell is set to speak at the annual central bank symposium this week amid growing bets that a rate cut is nearly guaranteed next month. But Powell may defy expectations, refusing to cave as the final battle against inflation looms large, Scotiabank (TSX:BNS) Economics warned in a recent note. "The Fed has not won the last inflation battle given recent PPI and CPI readings and the requirement to have much more data given factors like residual seasonality and sampling deficiencies," Scotiabank said. The annual Jackson Hole gathering kicks off with informal...
Federal Reserve Chair Jerome Powell will give a speech on the economic outlook and the Fed's review of its policy framework next Friday at the Kansas City Fed's annual central banking conference in Jackson Hole, Wyoming, the Fed said on Thursday. Powell's speech comes as data showing some impact of tariffs on inflation but the job market is also slowing, a combination fueling expectations for the Fed to cut interest rates by a quarter of a percent when it meets next month. U.S. President Donald Trump wants lower rates and is looking for a replacement for Powell, whose term ends in...
A 50-basis point interest rate cut next month could potentially send the wrong signal to markets about the state of the U.S. labor market, San Francisco Federal Reserve President Mary Daly told the Wall Street Journal. A soft July jobs report, as well as muted inflation data for the month, have fueled increased expectations that the Fed will slash borrowing costs at its September meeting. It would be the first drawdown by the central bank since it paused its policy easing cycle last December. Investors are now all but pricing in a 25-basis point reduction after the Fed's September 16-17...
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...