Despite “Strong” US Jobs Report, Fed Rate Cut Still Likely (Interest Rate Volatility Cube Still Spiked At Short End)

Despite Friday’s “strong” job report of 224,000 jobs added to the US economy and speculation that The Federal Reserve may actually NOT cuts rates at the next FOMC meeting, The Fed Funds futures market is still signaling an upcoming rate cut.

grreaTJOBS

And the expected path of Fed rate cuts (orange dashed line) is still downward sloping,

fedfundsparhg

The US dollar swaps curve, the OIS curve and the swaps SPREAD curve are all sagging at the short-end.

swapthing

The interest rate volatility cube is still spiked at the short end (according to swaptions).

swaption

Let’s see if things change by Monday afternoon (my class meets at 4:30 PM EST).

Fed Chair Powell may have more free time to socialize if Trump has his way!!

powellwithwomen

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.