The Weekly Tearsheet: Can a liability be an asset?
weeklytearsheet.substack.com
As expected, the Fed hiked the Fed Funds rate to 5% last week. It removed language from the FOMC statement saying that further hikes might be appropriate, which the market took as a signal that it is ready to pause. During the press conference, Jerome Powell emphasized that the Fed is not looking to cut rates any time soon. Bonds didn’t do much in reaction to the decision, but the flight-to-safety trade was already on with the problems in the regional bank space. The Fed Funds futures are not buying the Fed’s story, with the December futures predicting 75 basis points in rate cuts by the end of the year.
The Weekly Tearsheet: Can a liability be an asset?
The Weekly Tearsheet: Can a liability be an…
The Weekly Tearsheet: Can a liability be an asset?
As expected, the Fed hiked the Fed Funds rate to 5% last week. It removed language from the FOMC statement saying that further hikes might be appropriate, which the market took as a signal that it is ready to pause. During the press conference, Jerome Powell emphasized that the Fed is not looking to cut rates any time soon. Bonds didn’t do much in reaction to the decision, but the flight-to-safety trade was already on with the problems in the regional bank space. The Fed Funds futures are not buying the Fed’s story, with the December futures predicting 75 basis points in rate cuts by the end of the year.