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What Does a Fed Rate Cut Mean for My Hedging Program?

The long-anticipated Fed rate cut is just around the corner, and its potential impact on both customer and balance sheet hedging programs is significant.

By Isaac Wheeler
, Frank Fiorilli

In our recent webinar, Derivative Path’s Isaac Wheeler and Frank Fiorilli delved into these timely topics, providing expert insights on how to adapt your depository’s hedging amidst the changing landscape.

Key Takeaways:

  • Fed Rate Cuts: What to expect – While the market eagerly awaits the Fed kicking off its easing cycle, there’s more to the story than meets the eye. Isaac and Frank explored potential scenarios and the economic conditions driving these decisions.
  • Impact on ALM and Customer Hedges – With a highly aggressive Fed cutting schedule projected, our experts discussed how banks and credit unions can prepare their hedging programs, focusing on both higher and lower rate environments.
  • Strategies for Customer Hedges – From pay-fixed swaps to creative solutions like caps and step-down rates, Frank shared several actionable approaches to optimize hedging strategies for borrowers.
  • Practicing Discipline – With elections on the horizon and economic conditions shifting rapidly, hedging against interest rate volatility remains a crucial strategy.

Survey of attendees’ results – Where will the 10-Year US Treasury Yield be at the end of 2024?

Want to learn more about how these insights can apply to your institution? Listen to the replay for in-depth analysis, real-world examples, and practical advice on optimizing your hedging programs.

Click here to register and listen to the full replay

Isaac Wheeler
Isaac Wheeler

Isaac Wheeler is Managing Director and Head of Balance Sheet Strategy at Derivative Path, where he helps financial institutions structure and execute hedging transactions. Before joining the firm, Isaac spent five years at MFS Investment Management supporting execution of interest rate, currency and equity derivatives. He also spent time in MFS’s portfolio risk and technology teams. Isaac has a B.A. in Economics from Boston University.

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Frank Fiorilli

Frank Fiorilli is the Managing Director Bank Solutions at Derivative Path, Inc., where he has been a key figure since 2016. With over a decade of experience in the financial industry, Frank specializes in developing and structuring derivative solutions that meet the intricate needs of clients. Before joining Derivative Path, he honed his expertise in capital markets roles at Barclays and other investment banks. Frank has an MBA with a focus on Finance and Entrepreneurship from NYU Stern School of Business and B.A. in Finance from The College of New Jersey.

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