Traders Are Betting the Fed Will Hike Rates by a Half-Point in March

Bloomberg2023-03-08

Traders price in total of 100 basis points of hikes by FedPowell signaled he’s prepared for faster tightening if neededBond traders boosted bets that the Federal Reserve may re-accelerate the pace of ...

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Comments

UTOtrader
2023-03-08
UTOtrader
T
Ratt
2023-03-08
Ratt
Sad days for home buyer, good for buyers of trade, long roads ahead before shares raise there hats, the green mile is out of hands and hard to reach. Those that stick it out will win the pots of gold, be strong and hold.
MLFL
2023-03-08
MLFL
Good morning
nctony
2023-03-08
nctony
Trader's correct every share will be good. Let trader win[Miser] [Miser] [Miser]
逢場作戲又一日
2023-03-08
逢場作戲又一日
Great
Andrewinho
2023-03-08
Andrewinho
Good opportunity to grab!! 🤭🤭🤭

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Traders are betting that the Fed will raise the key borrowing costs by 109 basis points to a peak of about 5.66% by September.Shorter-maturity notes led the jump in yields, deepening the inversion of the yield curve and pushing the two-year Treasury rate above 5% for the first time since 2007.An upside down-shaped curve suggests that traders anticipate a more restrictive policy that will slow down the economy significantly. The Bloomberg dollar index jumped to a level unseen since early January, while the S&P 500 Index tumbled around 1.7%.Two-year yields jumped as much as 13 basis points to 5.02%, while 10-year yields were up just 2 at 3.98%. The gap between the two- and 10-year notes widened as much as 104 basis points, marking the deepest inversion since 1981. The 30-year yields were 113 basis points below two-year rates, marking a record gap between the two.In testimony before the Senate Banking Committee, Powell said the US central bank is likely to raise interest rates higher than previously thought. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase” the pace of rate hikes, he said.“He has double doses of hawkishness with potentially higher peak rates and faster pace of hiking,” said Tracy Chen, a portfolio manager at Brandywine Global Investment Management in Philadelphia. “His 25bps step-down might be premature, given the recent inflation data. This adjustment should lower the risk of Fed falling behind the curve again.”She said it’s too early to buy long-term bonds — or to “extend duration” in Wall Street parlance — because the labor market is too tight for the Fed to relent on its tightening campaign.“As cash becomes more attractive, there is a lesser need to stretch for yield,” she added.In the US afternoon, a government auction of $40 billion worth of three-year notes drew record demand from non-dealers, at yields lower than expected.A half-point increase in March would reverse the slowdown in the pace of hikes that began in December, when a half-point increase was followed by four three-quarter-point moves. Powell and his colleagues slowed the tightening further to a quarter-point move in February, bringing the policy rate to a range of 4.5% to 4.75%.On Tuesday, the rate on the March overnight index swap contract rose about 9 basis points to 4.98%, more than 40 basis points above the current effective fed funds rate. At that level, it fully prices in a quarter-point increase and suggests a half-point move is the most likely scenario.Following Powell’s speech, Monetary Policy Analytics, a research firm chaired by former Fed Governor Larry Meyer, raised its forecast for the Fed fund rate at the March meeting to 50 basis points, from 25.“The burden of proof looks significantly different after seeing Powell’s prepared remarks,” Meyer and his colleagues wrote. “Powell’s comments make it sound as though they need to be convinced not to speed the pace up. The presumption that’s been established is that they will hike 50 in March, unless they are convinced otherwise.”Before the next policy meeting in two weeks, Powell will have more economic data to make a decision on whether a change of the tightening pace is needed, including the payroll report Friday and inflation data next Tuesday.Powell has reinforced a view that “this a truly data-dependent central bank,” said Priya Misra, global head of rates strategy at TD Securities, and he “has injected further volatility to the pace and end point of hikes.”“Any surprises on the upcoming payroll and CPI reports will result in a big market reaction,” she adding.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9949038791,"gmtCreate":1678233513814,"gmtModify":1678233517174,"author":{"id":"3574547619690492","authorId":"3574547619690492","name":"UTOtrader","avatar":"https://static.tigerbbs.com/82be6befb29ac8516e463638d3f659d5","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3574547619690492","authorIdStr":"3574547619690492"},"htmlText":"T","listText":"T","text":"T","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949038791","repostId":1150777425,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949038169,"gmtCreate":1678233449451,"gmtModify":1678241076426,"author":{"id":"4131941718981642","authorId":"4131941718981642","name":"Ratt","avatar":"https://community-static.tradeup.com/news/aeee68ebc5db0a4075bb3aff6887e20e","vip":1,"hat":"https://static.tigerbbs.com/7b75ce0c34afff716602792a5d0929dd","crmLevel":1,"crmLevelSwitch":0,"idStr":"4131941718981642","authorIdStr":"4131941718981642"},"htmlText":"Sad days for home buyer, good for buyers of trade, long roads ahead before shares raise there hats, the green mile is out of hands and hard to reach. Those that stick it out will win the pots of gold, be strong and hold.&nbsp;","listText":"Sad days for home buyer, good for buyers of trade, long roads ahead before shares raise there hats, the green mile is out of hands and hard to reach. Those that stick it out will win the pots of gold, be strong and hold.&nbsp;","text":"Sad days for home buyer, good for buyers of trade, long roads ahead before shares raise there hats, the green mile is out of hands and hard to reach. Those that stick it out will win the pots of gold, be strong and hold.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949038169","repostId":1150777425,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949031508,"gmtCreate":1678233204404,"gmtModify":1678233207847,"author":{"id":"4115684828159522","authorId":"4115684828159522","name":"MLFL","avatar":"https://community-static.tradeup.com/news/1d7ab965a9728265436a2d2a8db471ce","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4115684828159522","authorIdStr":"4115684828159522"},"htmlText":"Good morning&nbsp;","listText":"Good morning&nbsp;","text":"Good morning","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949031508","repostId":1150777425,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949031268,"gmtCreate":1678233182854,"gmtModify":1678233186097,"author":{"id":"3557024931927052","authorId":"3557024931927052","name":"nctony","avatar":"https://static.tigerbbs.com/1449dfc5089ded0e8efe303fd4dd43b1","vip":1,"crmLevel":2,"crmLevelSwitch":1,"idStr":"3557024931927052","authorIdStr":"3557024931927052"},"htmlText":"Trader's correct every share will be good. Let trader win[Miser]&nbsp;[Miser]&nbsp;[Miser]&nbsp;","listText":"Trader's correct every share will be good. Let trader win[Miser]&nbsp;[Miser]&nbsp;[Miser]&nbsp;","text":"Trader's correct every share will be good. Let trader win[Miser] [Miser] [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949031268","repostId":1150777425,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949033663,"gmtCreate":1678232961253,"gmtModify":1678232964623,"author":{"id":"3555043402922696","authorId":"3555043402922696","name":"逢場作戲又一日","avatar":"https://community-static.tradeup.com/news/6a5fbf2ceb7c7ee0399d41e6348dadf7","vip":1,"hat":"https://static.tigerbbs.com/4c5ceab71416b120bab4604c0754b52a","crmLevel":5,"crmLevelSwitch":1,"idStr":"3555043402922696","authorIdStr":"3555043402922696"},"htmlText":"Great","listText":"Great","text":"Great","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949033663","repostId":1150777425,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949039785,"gmtCreate":1678232750247,"gmtModify":1678232754055,"author":{"id":"3581563418944392","authorId":"3581563418944392","name":"Andrewinho","avatar":"https://static.tigerbbs.com/3127e2bc40ab23064a5187a00a63e19b","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581563418944392","authorIdStr":"3581563418944392"},"htmlText":"Good opportunity to grab!! 🤭🤭🤭","listText":"Good opportunity to grab!! 🤭🤭🤭","text":"Good opportunity to grab!! 🤭🤭🤭","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949039785","repostId":1150777425,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":123,"commentSize":6,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1150777425"}