The past week’s data was influential, as it revealed that inflationary pressures appear definitively present and thereby solidified an on-hold posture from the Fed. Indeed, incoming Fed Chair Warsh is likely to encounter more forceful resistance from committee members to any policy-easing bias at the next FOMC in June. The Mideast situation, meanwhile, remains fluid, and any meaningful developments could move the rates market. Looking forward to next week, the data slate is lighter and composed of second-tier reports. The bond markets will close early on Friday the 22nd for the Memorial Day holiday weekend, and we encourage members to connect with the desk on the timing of any potential end-of-week longer-tenor advances...

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…