At Any Rate Global Rates: Digging into a week of DM central bank decisions
13 snips
Sep 19, 2025 Jay Barry, Head of Global Rates Strategy, shares his insights on pivotal central bank decisions from the Fed, BoE, and BoJ. He elaborates on the Fed's 25bp cut and its implications for U.S. rates, suggesting higher and steeper yields ahead. The conversation delves into the BoE's monetary stance and the hawkish signals from the BoJ, along with what these moves mean for the European and Japanese markets. Tune in for a compelling look at how developed markets are reacting to these shifts!
AI Snips
Chapters
Transcript
Episode notes
Fed Cut Framed As Risk Management
- The Fed's 25bp cut is framed as a risk‑management move that keeps policy asymmetric toward the labor market.
- That asymmetry should push growth, inflation expectations, and long yields modestly higher into next year.
Dovish Bias Likely Raises Long Yields
- An asymmetrically dovish Fed reaction function should lift inflation expectations and steepen yield curves.
- Fair value models also suggest US 10‑year yields are around 15bp too low and may mean‑revert higher.
Fed Expectations Hinged On Labor Data And Politics
- Near‑term Fed policy moves are unlikely to be driven by OIS pricing until the September employment report arrives.
- Political uncertainty around Fed leadership and Cook's case continues to influence curve dynamics and policy pricing.