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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
The key market takeaway from an article from the WSJ's Fed reporter Nick Timiraos making the rounds appears to be the repeated suggestion in the piece that the FOMC is eyeing a 50bp rather than 75bp hike in December.
- End-year pricing is down to 4.46%, or 138bp in hikes from current levels, from 4.53%, or 145bp, when the article was published - see chart.
- From the article: "Fed policy makers face a series of decisions. First, do they raise rates by a smaller half-point increment in December? And if so, how do they explain to the public that they aren't backing down in their fight to prevent inflation from becoming entrenched?... If officials are entertaining a half-point rate rise in December, they would want to prepare investors for that decision in the weeks after their Nov. 1-2 meeting without prompting another sustained rally. One possible solution would be for Fed officials to approve a half-point increase in December, while using their new economic projections to show they might lift rates somewhat higher in 2023 than they projected last month."
Dec2022 Fed Funds Implied Cumulative Hike Pricing By OIS (%)Source: BBG, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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