At Any Rate Global Rates: Trick or Treating with Central Banks
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Oct 31, 2025 Dive into the intriguing world of central banks as Ipek and Khagendra dissect recent developments that are shaking up derivatives markets. They unpack the latest FOMC rate cut and the surprising debates surrounding future easing. Powell's press conference sends ripples through market pricing, leaving listeners curious about upcoming rate movements. Additionally, the hosts explore the European Central Bank's strategy and examine the outlook for other key players like the BOE and Riksbank. It's a whirlwind tour of monetary policy impacts!
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FOMC Cut But Internal Dissent Looms
- The FOMC cut rates 25bp and ended QT but dissent revealed internal caution about further easing.
- Chair Powell warned December cuts are "far from a foregone conclusion," spurring yields higher.
Swap Spreads Reacted To Policy Signals
- Long-end swap spreads widened over the month driven by QT, benchmark talk and Treasury supply concerns.
- The FOMC meeting and Powell's tone prompted a sharp narrowing, showing sensitivity to policy messaging.
ECB Steady; Volatility Is Dampened
- ECB left rates on hold and uses meeting-by-meeting data dependence, keeping the front end range-bound.
- Khagendra sees the ECB biased to cut only if inflation undershoots next year, making volatility subdued.