✨ 🔺 Longer-Term Estimates Of Fed Policy Extend Higher: Cable FX Macro
- Rosbel Durán
- Sep 20, 2023
- 1 min read
Wednesday session saw the FOMC keep rates unchanged as the Fed skipped a rate hike but signal further increases
The U.S. Treasury space was bid into the announcement, however, gains were pared after the decision and Fed projections were released
The session saw the U.S. 2-year yield rise to the highest since 2006, the 10-year yield jumped to cycle highs of 4.4070% levels not seen since 2007
A prior day, the space saw the 5-year yield breaching 4.5%, highest since 2007
Longer-end rates moving higher is particularly interesting, market commentary is comparing these to the Fed's median of longer-run dot projections, the metric has been at around 2.50% for some time
Powell was questioned on the level of neutral rates (R*), on this he said: "the neutral interest rate may be higher, we don't know yet" and "plausible the neutral rate is higher than the long-run rate"
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