Bond market enters wait-and-see mode as investors await Waller's first Federal Reserve meeting for policy direction
- Bond investors are approaching the first policy meeting under Fed Chair Walsh with heightened caution. According to the latest JPMorgan survey, short-term duration holdings have risen to 33%, with neutral positions climbing for the third consecutive week to 58%, reflecting the market’s aversion to uncertainty regarding monetary policy direction.
- The market generally expects this meeting to keep the benchmark interest rate unchanged within the 3.50%-3.75% range. However, rate futures have priced in a 64% probability of a rate hike in December, a sharp jump from 24% just a month ago, as earlier expectations for Walsh’s dovish stance have shifted toward a repricing for a more hawkish approach.
- Although the US and Iran have reached a peace framework agreement and may soon reopen transport through the Strait of Hormuz—potentially causing energy costs to gradually decline—stronger-than-expected labor data and persistent inflation accumulated during wartime continue to pose complex challenges for policymakers.
- Several managers have pointed out that institutions are shortening duration and focusing on short to medium-term bonds to limit price volatility, while selectively allocating to investment-grade credit, with an overall defensive stance, awaiting clearer signals from the Federal Reserve.
- Walsh has previously expressed reservations about forward guidance. The market's attention will be on whether this statement and the dot plot provide a transparent policy path. If the communication pace is too abrupt, it could increase market volatility. Major adjustments to policy tools are unlikely this week.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
International oil prices rose slightly on October 6, New York crude closed at $89.44
International oil prices saw a slight increase on October 6. By the close of trading, the price of light crude oil futures for November delivery on the New York Mercantile Exchange edged up by $0.01, settling at $89.44 per barrel, a gain of 0.01%. Brent crude oil futures for December delivery in London rose by $0.26 to close at $100.58 per barrel, an increase of 0.26%. In recent times, international oil prices have remained volatile. Multiple supply and demand factors continue to support oil prices: on one hand, production cuts by oil-producing countries are tightening market supply; on the other hand, fluctuations in expectations for global economic recovery create uncertainty on the demand side for crude oil. The future path of oil prices will continue to be influenced jointly by geopolitical developments, major economies' energy policies, and other factors.
The US Dollar Index fell by 0.33%, closing at 101.833, while the euro and the pound strengthened.
The U.S. Dollar Index, which measures the dollar against six major currencies, fell by 0.33% on the day, closing at 101.833 in the late forex session. By the end of trading in New York, 1 euro was exchanged for 1.1261 U.S. dollars, higher than the previous day's 1.1215. One pound sterling was exchanged for 1.3277 dollars, up from 1.3219 in the previous session. One U.S. dollar was exchanged for 158.12 yen, higher than 158.00 yen on the previous day; one U.S. dollar was exchanged for 0.8313 Swiss francs, up from 0.8307; one U.S. dollar was exchanged for 1.4209 Canadian dollars, down from 1.4256; and one U.S. dollar was exchanged for 9.9861 Swedish kronor, down from 10.0403.
Russia Claims Aframax Rio Oil Tanker Attacked by Unmanned Vessel
The Russian Ministry of Transport has announced that the Aframax-class oil tanker "Aframax Rio" was attacked by an unmanned boat. The Aframax-class tanker involved is a medium-sized vessel with a deadweight usually between 80,000 and 120,000 tons, and is a common ship type in the international crude oil transport market. Incidents involving such tankers often have a direct impact on the security situation of shipping in the affected regions.
Crypto prices
More
