Swiss National Bank Signals Aggressive Currency Intervention
Amid global uncertainty, the Swiss franc surges, pressuring exports and keeping inflation at 0.1%. The SNB plans aggressive intervention: selling francs and buying foreign currencies to weaken the franc. This may trigger U.S. tensions due to past manipulation accusations and tariffs. Switzerland faces a dilemma: protect its economy or avoid political backlash, highlighting how central banks now navigate inflation, geopolitics, trade wars, and market psychology. Source: CNBC
Big week ahead for centralbanks
Source: Bloomberg
BREAKING: President Trump asks Jerome Powell to LOWER INTEREST RATES IMMEDIATELY to save the economy.
"He should be dropping interest rates IMMEDIATELY," Source: Bull Theory @BullTheoryio
For the first time this year a 2026 rate cut is no longer fully priced
We are witnessing pronounced increases at the front-end of the US yield curve as doubts grew about the Fed’s ability to cut rates this year, even under a new Chair. There are now just 20bps of cuts priced in by the December meeting, meaning that for the first time this year a 2026 rate cut is no longer fully priced. Instead, investors have to look as far out as the June 2027 meeting for the first fully priced cut. Source: CME Fed Watch Tool
The odds of a March interest rate cut have fallen to just 2%
Source: Barchart @Barchart
Christine Lagarde is expected to leave the ECB before her term ends in 2027, aiming to give Emmanuel Macron and Friedrich Merz the opportunity to choose her successor.
With the French presidential election approaching, Lagarde may step down early to let Macron and Merz influence her ECB successor. Key stakes: filling the power vacuum, deciding among top contenders like Hernández de Cos, Knot, Schnabel, and Nagel, and shaping the ECB’s post-crisis legacy.
The number of federal government employees is now at it’s lowest level in 50+ years.
Dropped off a cliff after Trump was elected. Source: FRED, Geiger Capital
So much for a hawkish incoming Fed chair.
Kevin Warsh, nominee for Fed Chair, has proposed a “New Fed-Treasury Accord” inspired by the 1951 agreement that granted Fed independence. The plan aims to restore Fed independence, shrink its $6.6 trillion balance sheet, and clarify roles between the Fed and Treasury. The Fed would focus on short-term rates and price stability, while the Treasury manages bond markets. Warsh also favors less forward guidance, letting the Fed react to data rather than constantly signaling. The goal is to prevent the Fed from becoming a tool for cheap government borrowing, modernize its balance sheet, and protect its ability to fight inflation.
