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 Fed is widely expected to slash interest rates at the conclusion of its latest two-day policy gathering, although the size of the possible drawdown and commentary around the move remain a source of debate. Markets are all but certain the central bank will cut borrowing costs by at least 25 basis points from the current target range of 4.25% to 4.5%, while there is also a slim chance of a deeper, half-percentage point reduction. Underpinning these estimates have been signs of a weakening U.S. labor market, which are seen overshadowing simultaneous indications of sticky inflation. In...
Bank Indonesia unexpectedly cut its benchmark interest rate by 25 bps to 4.75% at its September 2025 policy meeting, marking the third consecutive monthly rate cut and defying market expectations to hold rates steady at 5.0%. This is the sixth rate reduction since last September, bringing the benchmark rate to its lowest level since October 2022. The decision reflects projections that inflation for 2025–2026 will remain within the central bank's target range of 2.5% ± 1%, a stable Rupiah exchange rate, and ongoing efforts to support economic growth. Recent data showed that GDP grew by 5.12%...
U.S. President Donald Trump's nomination to the Federal Reserve Board of Governors, economist Stephen Miran, was approved by the Senate in a narrow vote on Monday evening. Miran's appointment to the Fed board was approved in a 48-47 vote, with the confirmation now allowing him to participate in the Fed's September 16-17 meeting. Miran was nominated by Trump to fill a seat abruptly vacated by former Fed governor Adriana Kugler, with his term set to expire in January 2026, when the seat's original term ends. Miran currently serves as the Chair of the Council of Economic Advisers (CEA), and...
U.S. President Donald Trump cannot fire Federal Reserve Governor Lisa Cook, an appeals court ruled on Monday, allowing her to remain on the central bank's board for a closely-watched policy meeting this week. The U.S. Court of Appeals for the District of Columbia Circuit in a 2-1 ruling denied the Department of Justice's request to hold an earlier ruling blocking Trump from removing Cook. Monday's ruling came just a week after a district judge also ruled against Cook's firing. U.S. District Judge Jia Cobb had last week ruled that Trump's allegations of mortgage fraud against Cook, which...
After a nine-month pause, the US Federal Reserve is expected to resume its cycle of interest rate cuts this week. The big question is how far will it go? US President Trump has already made it clear that he wants to see cuts to a key interest rate of around 1% (from the current 4.25-4.50%), and probably as quickly as possible. Given the risk of stagflation in the wake of US tariffs, such a sharp easing of monetary policy would be disastrous for the US Dollar (USD), Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes. Trump wants the Fed to help the Treasury finance the...
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...