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....
U.S. President Donald Trump on Tuesday said there was a long list of people who could take over the Federal Reserve, slamming current chairman Jerome Powell as the central bank prepared to meet this week. "We have an incompetent head of the Fed... we got a bad Fed guy, but he'll be out of there in a few months, and we'll get somebody new," Trump told business leaders at a dinner in Tokyo during his week-long trip to Asia. Powell's term ends in May. The Republican president added that he had wanted Scott Bessent to take over the U.S. central bank but that his Treasury chief declined: "I'm...
Federal Reserve policymakers are widely expected to reduce U.S. short-term borrowing costs this week by a quarter of a percentage point for the second time this year as they look to prevent further slowing in the labor market. Odds are it won't be the last of the series. Climbing unemployment insurance claims suggest that labor market demand continues to cool, even as the government shutdown delays publication of most official economic statistics, including the unemployment rate, last estimated at 4.3% in August. Milder-than-expected inflation readings, including last week's report that...
Federal Reserve policymakers are widely expected to reduce U.S. short-term borrowing costs this week by a quarter of a percentage point for the second time this year as they look to prevent further slowing in the labor market. Odds are it won't be the last of the series. Climbing unemployment insurance claims suggest that labor market demand continues to cool, even as the government shutdown delays publication of most official economic statistics, including the unemployment rate, last estimated at 4.3% in August. Milder-than-expected inflation readings, including last week's report that...
Following the final October meeting (October 28–29, 2025), the FOMC calendar still lists December 9–10, 2025. This means the Fed could technically still act once more this year. Market and economist expectations, according to surveys and money market prices, still position a high probability of a cut in December in addition to October. Several major economists also still project two cuts before the end of the year. Powell hinted that monetary policy tightening could end within a few months. This is a looser tone and is compatible with further policy easing if accompanied by supportive...
The Fed will meet on October 28-29, 2025. This meeting is crucial because the market still considers the possibility of an interest rate cut, but its direction will be heavily influenced by the September CPI (US inflation) release, which was rescheduled to Friday, October 24 due to the shutdown. Therefore, the Fed is really waiting for the data before making a decision. In his last speech (October 14), Fed Chairman Jerome Powell said the US economy was "stronger than expected," but the job market was weakening. This means the Fed remains cautious and will determine policy on a...
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...