Daily Flows & Insights – FOMC Reveals Cautious But Steady Fed

Daily Flows

  • 5.30% for 3-5 year term deposits are still being offered by ‘A’ rated counterparties, even with an easing in reference rates.
  • With minimal bespoke offerings yesterday, market participants with accommodating investment policies have been able to make the most of above market offerings.
  • There were two way flows in the NCD market, with the going rate staying at +40 for 3 months all week.


FOMC Reveals Cautious But Steady Fed

  • The consensus among the majority of Federal Reserve policymakers during the September 2023 Federal Open Market Committee (FOMC) meeting was that a prospective interest rate hike was deemed appropriate, though some members held the view that further increases were unnecessary.
  • All participants concurred on the necessity of upholding a restrictive monetary policy until inflation stabilised at the targeted 2%.
  • Expectations among meeting attendees were that upcoming data would shed light on the ongoing progress in addressing disinflation concerns and achieving better equilibrium in labour markets.
  • The members noted that the economic landscape’s future trajectory was fraught with considerable uncertainty. There were apprehensions regarding the stability of data, the potential for data revisions, and difficulties in estimating the neutral policy rate.
  • In the September 2023 meeting, the Federal Reserve opted to maintain the target range for the federal funds rate at an elevated level not witnessed in 22 years, specifically at 5.25%-5.5%.
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Curve Team
Jack Pedersen