Data released in the past week was overall slightly better/higher than expectations, but the market-impactful news of the week was clearly the eruption and ongoing Mideast conflagration. As of this writing, rates have notably rebounded from the multi-month lows of last week. We provide further context and color on the markets herein. In terms of the Fed policy, the market has pushed out the timeline of prospective rate cuts. The chance of a cut at this month’s FOMC is basically nil. After, as of a week ago, fully pricing in a 25-bps cut by mid-to-late summer, the market now prices for that outcome by September/October.

Back by popular demand, Frank Farone, Managing Director of Darling Consulting Group, returns to join us once again for an informative session focused on Liquidity and Asset/Liability Management. Frank will address key challenges and provide actionable strategies to help FHLBNY members stay resilient and take advantage of the new rate environment now and in the months/years to come.

We are now experiencing a “higher for longer” phase in the interest-rate cycle, accompanied by an inversion in the short-to medium terms followed by a steepening (see following chart). The Fed is still in a restrictive posture, but market expectations indicate a near-term easing, however, uncertainty surrounding the potential of future heightened growth leading to elevated inflation is causing steepening at the longer-end of the curve…