3 Things to Know:
- Rate volatility moderates. Amidst a dearth of government economic data due to the ongoing shutdown, rates traded within a relatively narrow range. Rates ended the month ~20 basis points above September’s year-to-date lows.
- Fed remains divided on policy path. As expected, the Fed delivered a 25 basis point rate cut in October, but two FOMC voters dissented; one in favor of no cut, and the other in favor of a larger 50 basis point reduction. Chair Powell emphasized the lack of consensus around the path forward at his press conference when he said a rate cut in December is far from certain.
- US-China trade talks progress. Rates moved sharply in response to US-China trade headlines throughout the month. Initial fears of higher tariffs pushed rates lower, but fears abated somewhat after the two countries reached a trade “truce,” the stability of which remains uncertain.
Explore More:
- September ADP Data (-7 bps)
- China Tariff Threat (-11 bps)
- Regional Bank Credit Worries (-7 bps)
- Trump Tempers Tariff Threat (+5 bps)
- Trump-Xi Trade Talks Confirmed (+6 bps)
- October FOMC Meeting (+9 bps)
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