by Aptus PM Team | Aug 23, 2024 | Blog, Bonds
Rate Cut Expectations All eyes are on Jay Powell this week in Jackson Hole as he lays out the FOMC plan for the upcoming rate cut cycle. As of now, the market is pricing in ~1.25 cuts (roughly 31bps), basically a 25bps cut. Over the past weeks, we’ve bounced...
by Aptus PM Team | Aug 9, 2024 | Blog, Bonds
We continue to believe the first Fed rate cut will be in September and this move will likely start a sequence of cuts. With that being said, we don’t see the case for a jumbo -50bp cut. The Fed’s Jackson Hole meeting at the end of August deserves special attention for...
by Aptus PM Team | Aug 1, 2024 | Blog, Bonds
As expected, the Fed kept the funds rate range unchanged at 5.25% – 5.50%, and while the tone of the statement was less hawkish, it didn’t overtly hint that a rate cut in September was a certainty. They did make some substantive changes to the statement...
by Aptus PM Team | Jul 26, 2024 | Blog, Bonds
Real Rates… Was the Post-GFC Period the Anomaly? The current real rate (interest rate adjusted for inflation) sits around 2.93%, which is the highest level since 2007. However, the post-financial crisis real rate period, shown in red, was not a “normal” period....
by Aptus PM Team | Jul 11, 2024 | Blog, Bonds
June CPI Reaction In response to the CPI print, markets are now pricing in an 8.5% chance of a July cut, a 94.5% of a September cut, and an 85.6% chance of at least 2 cuts by the end of the year. We think the market should not ignore the signal here. We’re...
by Aptus PM Team | Jun 27, 2024 | Blog, Bonds
Higher Neutral Rate Could Lead to Structurally Higher Interest Rates The graphic below shows pricing for forward contracts referencing the five-year interest rate in five years. This gives a proxy for the market’s view of where US rates might end up. ...
