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Swap Rate Rundown

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Sahil Pankhaniya
Associate
Swap Rate Rundown August

August 2025 Highlights

3 Things to Know:

  • Rates hit YTD lows. Rates plummeted ~20bps to start August after weak payrolls data and remained within a 10bp range for most of the month. During the final week of August, rates fell ~15bps and set new YTD lows. 
  • Labor data shifts Fed outlook. July’s weak payrolls data disrupted the narrative of a stable labor market. Chair Powell called Fed policy “appropriate” at the July FOMC Meeting but later acknowledged labor vulnerabilities at Jackson Hole, saying they “may warrant adjusting our policy stance.” Futures markets see a ~90% chance of a 25bp cut in September vs. ~47% on the day of the July FOMC meeting. 
  • Trump administration pressures the Fed. Secretary Bessenturged the Fed to cut 50bps in September and said policy rates should be 150bps lower considering the latest labor data. Soon thereafter, President Trump accused Fed Governor Cook of mortgage fraud and called for her removal. The move was viewed as an attempt to replace Cook with a more dovish FOMC voter, leading to an immediate decline in rates and, perhaps more importantly, casting doubt on the future independence of the Fed. 

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Sahil Pankhaniya

Sahil Pankhaniya is an Associate at Derivative Path, where he structures and executes interest rate and FX hedging strategies for community, regional, and super-regional banks. He previously worked as an Investment Analyst at West Potomac Capital where he specialized in conducting fundamental analysis on U.S. banks and helped advise the U.S. Treasury Department on investments in community financial institutions. He holds a Bachelor of Science in Statistics and Finance from The George Washington University.

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