The ongoing Mideast conflagration remains the main event for markets. As of this writing, rates have notably rebounded from the multi-month lows of end-February. See herein for context and color. The key event of the upcoming week should be the FOMC meeting and policy decision. While no change in rates is the universal expectation, the Fed’s updated quarterly Summary of Economic Projections (SEP) will also be reviewed by market participants. The SEP provides Fed members’ projections on growth, inflation, employment, and rates (aka “dot plot”). Given the outbreak of the Mideast conflict, the FOMC statement and Chair Powell’s post-meeting press conference will surely address the topic, although the feedback may be of the “too-soon-to-tell-with-elevated-uncertainty” variety on its lasting impacts. The market’s pricing of the Fed has shifted notably; please see herein for more information.

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…