Daily Flows

• Cautious guidance from Powell overnight may have led to a rise in 5-year reference rates. To the benefit of investors, there is an opportunity today to lock in 5.05% for a 5-year term deposit from an ‘A’-rated bank.
• With the RBA expected to cut the cash rate next week, market participants are flocking to lock in longer-duration rates. 5.15% for 12 months from State Bank of India (A-3/BBB-) represents a fleeting moment in the market.
• If the RBA does cut rates as expected, investors may have to wave goodbye to short-term offerings above 5.00% for less than 12 months.

Powell in No Rush

• Fed Chair Powell reaffirmed that the FOMC is in no rush to adjust interest rates, citing a balanced labour market and well-anchored long-term inflation expectations.
• Powell avoided questions on tariffs, stating that it is not the Fed’s role to comment on trade policy but acknowledged that consumers may still bear the cost of higher tariffs.
• Front-end US Treasury yields rose slightly by 1–2bps, but the broader market reaction was muted, as Powell’s cautious approach was already well-anticipated.
• For Australian markets, the Fed’s cautious stance suggests global yields may remain elevated, potentially reinforcing the case for patience in the RBA’s rate-cut timeline.