Daily Market Color

Swap Rates Rise on Hawkish Fed Members

Rates rise slightly on Fed commentary. Fed officials continued to offer hawkish opinions following last week’s inflation data, which pushed rates 2-3bps higher today. Despite the move, rates are 3-5bps lower over the past 5 sessions and ~20bps lower than highs reached in late April. Meanwhile, equities were mixed ahead of NVDA’s earnings release, with the DJIA down nearly 0.50% and the NASDAQ up 0.65%. The S&P500 closed 0.09% higher and remains above 5,300.

Today’s Fed speakers make it clear that inflation hasn’t declined enough to cut rates:  

JPM’s Dimon criticizes Basel III Endgame proposals. Jamie Dimon has long been a critic of proposed rules that would require higher capital levels at the largest US banks. Today, he reiterated that the rules would hurt the economy, saying that regulation is “damaging America at this point.” In a statement written in December, Dimon argued that the rules are unnecessary given that the largest banks have “dramatically” increased the quality and quantity of capital since the 2008 financial crisis. He added that banks would no longer be able to deploy capital when it is most needed, while lending would shift toward less regulated and transparent markets, such as private credit.

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