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....
Two weeks before the US Federal Reserve's final meeting, with the federal government's data taps closed, Atlanta Fed staff bolstered their economic outlook by analyzing how previous surveys of business executives aligned with data on employment, spending, output, and other data recorded in federal reports. These results bolstered their confidence that central bank policymakers still have a good, if rough, alternative ahead of the October 28-29 meeting: between surveys proven to closely track the economy, private data the Fed has used for years, and new insights from emerging technology...
Chicago Federal Reserve President Austan Goolsbee on Thursday said the lack of official data on inflation during the government shutdown "accentuates" his caution about cutting interest rates further. "I lean more to the, when it's foggy, let's just be a little careful and slow down" Goolsbee said in an interview with CNBC. Fed policymakers are relying on private data and their own surveys and outreach to gauge where the economy is heading while official economic data from the Bureau of Labor Statistics and other U.S. agencies is on pause during what is now a record-long federal government...
Parts of the U.S. economy, particularly housing, may already be in recession because of high interest rates, U.S. Treasury Secretary Scott Bessent said Sunday, repeating his call for the Federal Reserve to accelerate rate cuts. "I think that we are in good shape, but I think that there are sectors of the economy that are in recession," Bessent said on CNN's "State of the Union" program. "And the Fed has caused a lot of distributional problems with their policies." Bessent said that, although the overall U.S. economy remains solid, high mortgage rates still hinder the real estate market....
The Reserve Bank of Australia (RBA) decided to maintain the cash rate at its current level following its November policy meeting. The RBA assessed that despite improving financial conditions, inflationary pressures remain in the economy, particularly with recovering private demand and a slightly tighter labor market. The RBA Board also recognized that the full impact of the previous rate cut had not yet been fully felt, choosing to remain cautious and update its outlook based on evolving data. The RBA also emphasized the importance of monitoring developments in the global economy, financial...
Federal Reserve Bank of Dallas President Lorie Logan said she does not support the U.S. central bank's decision to cut interest rates this week and will likely consider it appropriate to keep rates unchanged at its next meeting because inflation remains too high. "I don't see a need to cut rates this week. And I would find it difficult to cut rates again in December unless there is clear evidence that inflation will fall more quickly than expected or that the labor market will cool more rapidly," Logan said Friday in prepared remarks for an event in Dallas. Fed officials cut their...
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...