Daily Flows & Insights – Debt Ceiling Talks Resume as Fed Presidents Remain Divided

Daily Flows

  • Term deposit flow continues to be directed to elevated areas of the yield curve. with 6M BBSW at 4.11% and 1 Year Swaps at 4.01%, outright levels of 5.10% continue to be offered.
  • Bond activity in the secondary market has picked up. Market participants have been able to pick up Feb 2026 A+ floating rate notes with a trading margin of 3M BBSW +88.
  • Today, a BBB+ ADI has come to market offering +55 for 6 month NCD funds. Those looking to take advantage will need to be quick to act as it is a limited offer.

Debt Ceiling Talks Resume as Fed Presidents Remain Divided.

  • Market continue to hang of the headlines related to the debt ceiling negotiations while we also saw more plenty more Fed comments ahead of the June meeting.
  • Talks resumed over the debt ceiling, giving more hope that a deal will be done with house speaker McCarthy saying there should be no fear of a US default when questions on the prospect of deal being done.
  • Meanwhile Fed Voting Member Neel Kashkari said it was a “close call” when it came to voting for another rate hike at the next meeting.
  • Others were more pointed on their view with the Fed’s Raphael Bostic said he preferred a pause highlighting the lag in which monetary policy works while James Bullard said at least two more 25bp hikes were warranted.
  • It makes for an interesting meeting in a little over three weeks time.
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Curve Team
David Flanagan