Daily Market Color November 2, 2022Fed Remains Hawkish Powell reiterates commitment to policy tightening following Fed rate hike. The FOMC raised the Fed Funds rate by 75bps to a 3.75% – 4.00% range today and will continue to runoff up to $95bn of securities holdings per month. In his public comments, Chair Powell said that “we still have some way to go” before rates are sufficiently tight and hinted at an increase in the terminal rate. While fresh language added to the FOMC statement touched on slowing the pace of tightening, Chair Powell said in the Q&A that “it is very premature to be thinking about pausing”. Stocks ended the day lower with the S&P 500 down 2.5% to 3,760, while yields generally increased with the 2 year up ~8bps to 4.62% and the 10 year up ~5bps to 4.10%. A side by side comparison of the Fed’s statement can be read here. US quarterly debt sales held steady while buybacks are considered. Today, the US Treasury announced that they will halt cutbacks on quarterly sales of longer-term debt and said that they are considering a plan to repurchase old securities, operations that could help address concerns about Treasury market liquidity. Day ahead. Initial jobless claims figures will be released tomorrow at 8:30 EST, along with a host of other data releases throughout the morning.
