Free Trial

Fed Chair Powell Opens Door to 50Bp Hike and Then Some

US TSYS

Tsys reversed gains, yield curves extended inversion to 1981 levels (2s10s -105.513) after this mornings hawkish comments from Chairman Powell: possibility of larger, faster hikes and higher terminal rate spurred heavy selling in short end.

  • Salient short end metrics: 2Y yield climbed over 5% to 5.0168% high, March'23 Eurodollar futures traded 94.785 (-0.1325)
  • Fed funds implied hike for Mar'23 up to 40.3bp vs. 30.5bp this morning, May'23 cumulative 74.1bp (+14.3) to 5.315%, Jun'23 96.0bp (+18.5) to 5.535%.
  • Terminal rate via Fed Funds at 5.635% in Oct'23.
  • Focus turns to private ADP employment data at 0815ET Wednesday, Nonfarm Payrolls this Friday at 0830ET.
  • Fed enters media blackout in regards to policy this Friday at midnight.

To read the full story

Close

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.