MNI BRIEF: Higher Defence Spend To Weigh On EU Ratings -Scope

MNI China Daily Summary: Friday, February 21

MNI INTERVIEW2 -Banxico Optimistic On Non-Core Inflation-Heath

MNI BOK WATCH: Board To Ease Base Rate To 2.75%

MNI China Press Digest Feb 21: Consumption, Financing, Sino-EU

MNI: UK FEB FLASH MANUF PMI 46.4 (FCST: 48.5); JAN 48.3

MNI: EUROZONE FEB FLASH MANUF PMI 47.3 (FCST: 47.0); JAN 46.6

MNI: GERMANY FEB FLASH MANUF PMI 46.1 (FCST: 45.5); JAN 45.0

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

GERMANY: Kukies Considers Potential Non-Implementation Of 2024 Suppl' Budget

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

STIR: Hawkish Musalem Can’t Sway Risk-Off Rally In Fed Rates

STIR
BulletMarketsFixed Income BulletsForeign Exchange Bullets
  • Fed Funds implied rates have seen little reaction to St Louis Fed’s Musalem (’25 voter) maintaining his hawkish bias, if anything possibly extending to be a hawkish outlier in noting upside inflation risks being greater than those of downside unemployment risks (noted above).
  • The day’s net decline in equities, twin-pronged with Walmart results and banks under pressure, continues to weigh and, the March meeting aside, has seen an unusually uniform 2.5-3bp decline on the day for meetings from May through to year-end.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 6bp May, 15.5bp Jun, 21bp Jul, 30bp Sep and 40bp Dec.
  • Musalem’s Q&A at the Economic Club of NY is ongoing. Still to come, Barr talks on regulation at 1430ET before Kugler (permanent voter) at 1700ET on inflation and the Phillips Curve (text + Q&A). She spoke on Feb 7, i.e. post payrolls and pre-CPI/PPI, arguing to keep rates on hold for “some time”. 
image
152 words

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.
  • Fed Funds implied rates have seen little reaction to St Louis Fed’s Musalem (’25 voter) maintaining his hawkish bias, if anything possibly extending to be a hawkish outlier in noting upside inflation risks being greater than those of downside unemployment risks (noted above).
  • The day’s net decline in equities, twin-pronged with Walmart results and banks under pressure, continues to weigh and, the March meeting aside, has seen an unusually uniform 2.5-3bp decline on the day for meetings from May through to year-end.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 6bp May, 15.5bp Jun, 21bp Jul, 30bp Sep and 40bp Dec.
  • Musalem’s Q&A at the Economic Club of NY is ongoing. Still to come, Barr talks on regulation at 1430ET before Kugler (permanent voter) at 1700ET on inflation and the Phillips Curve (text + Q&A). She spoke on Feb 7, i.e. post payrolls and pre-CPI/PPI, arguing to keep rates on hold for “some time”. 
image