The political pressure narrative seems overblown--there's a finite amount of focus, and it seems not unlikely that the Fed may benefit from being (relatively) ignored in the face of... take your pick of the election "firsts" we're about to experience.
Update on this one: the H4Z4Z5 spread is now trading at -0.02, pricing pretty much the same amount of cuts in 2024 as 2025
I think you're better off doing a h5/h6 bear flattener through options
There’s no frigging way we’re getting 150bp of cuts this year, no way Powell wants to be the next Arthur Burns !
The political pressure narrative seems overblown--there's a finite amount of focus, and it seems not unlikely that the Fed may benefit from being (relatively) ignored in the face of... take your pick of the election "firsts" we're about to experience.
Why would you put on the H4/Z4 bull spread side if you think short term rates are due to go higher here?
I understand the Z4/Z5 bear spread side as rate cuts are pushed out, but that H4 long is confusing me.
any thoughts on SONIA and Euribor?
Both have same characteristics as SOFR (loads of cuts in March 24 to March 25, and only a little in next year)
Economic situation is different to the US and the UK still have significant inflation, although falling rapidly