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....
A divided Federal Reserve cut interest rates last month even as many policymakers cautioned that lowering borrowing costs further could risk undermining the fight to quell inflation that has been above the U.S. central bank's 2% target for four and a half years, the minutes from the October 28-29 meeting showed on Wednesday. "Many participants were in favor of lowering the target range for the federal funds rate," the minutes stated, while noting some members of that group also would have been satisfied if the policy-setting Federal Open Market Committee had left rates steady. Several...
U.S. President Donald Trump on Wednesday doubled down on his criticism of Federal Reserve Chairman Jerome Powell for not lowering interest rates more quickly, saying: "I'll be honest, I'd love to fire his ass." Trump, speaking at a Saudi Arabia-backed investment forum in Washington, urged his Treasury secretary, Scott Bessent, to accelerate the hunt for a successor for Powell. "You've got to work on him, Scott. The only thing Scott's blowing it on is the Fed," Trump said about Bessent, who was in the audience for the event at the Kennedy Center in Washington. "The rates are too high,...
The Minutes of the United States (US) Federal Reserve's (Fed) October 28-29 monetary policy meeting will be published on Wednesday at 19:00 GMT. The US central bank decided to cut the policy rate by 25 basis points (bps) to the range of 3.75%-4% at that meeting, but Fed Governor Stephen Miran voted in favor of lowering the fed funds rate by 50 bps, while Kansas Fed President Jeff Schmid preferred no change. Jerome Powell and company opted to reduce the policy rate in OctoberThe Federal Open Market Committee (FOMC) decided to cut the interest rate by 25 bps in October, as widely anticipated....
The global economy is entering a fragile phase, with growth slowing, while the shadow of recession has not completely disappeared. The World Bank projects global economic growth of only around 2.3% in 2025, with a "sluggish" recovery in the following years. In the United States, several models now assess the probability of a recession in the range of 20–40% by the end of 2025, indicating that downside risks remain real even though they are not yet a baseline scenario. The IMF also warns that prolonged uncertainty, protectionism, and fiscal vulnerabilities could trigger further shocks to...
Federal Reserve Vice Chair Philip Jefferson said on Monday the U.S. central bank needs to "proceed slowly" with any further interest rate cuts as it eases policy towards a level that would likely stop putting downward pressure on inflation. In remarks prepared for delivery at a Kansas City Fed event, Jefferson said he agreed the central bank's quarter-percentage-point rate cut last month was appropriate, given increased risks to the job market and the likelihood that inflation risks "have declined somewhat recently." "The current policy stance is still somewhat restrictive, but we have...
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...