Market Action

June 18, 2025

The FOMC kept things steady today:

Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; Alberto G. Musalem; Jeffrey R. Schmid; and Christopher J. Waller.



The dotplot (page 4 of the Summary of Economic Projections indicated an overall expectation of the policy rate being about maybe 3.00% in the (post 2027) “longer term”).

PerpetualDiscounts now yield 5.97%, equivalent to 7.76% interest at the standard equivalency factor of 1.3x. Long corporates yielded 4.92% on 2025-6-18. Therefore, the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has widened slightly (and perhaps spuriously) to 285bp from the 280bp calculated but not reported on 2025-6-11.

I’ll post more about my hiatus eventually. For now, I’m too busy trying to replace things!

I apologize for the formatting of this post. The twelve-year-olds who are in charge of wordpress are helping me with helpful formatting additions to my posts.
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
IndexMean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
IssuesDay’s Perf.Index Value
Ratchet0.00 %0.00 %00.0000.3672 %2,267.6
FixedFloater0.00 %0.00 %00.0000.3672 %4,414.1
Floater7.04 %7.09 %60,38912.5020.3672 %2,543.9
OpRet0.00 %0.00 %00.0000.2382 %3,651.1
SplitShare4.79 %4.40 %67,9672.5380.2382 %4,360.2
Interest-Bearing0.00 %0.00 %00.0000.2382 %3,402.0
Perpetual-Premium0.00 %0.00 %00.000-0.1721 %2,944.9
Perpetual-Discount5.84 %5.97 %44,15613.8633-0.1721 %3,211.3
FixedReset Disc5.62 %6.29 %114,69512.9246-0.0453 %2,890.6
Insurance Straight5.79 %5.87 %51,84814.1420-0.0232 %3,127.1
FloatingReset5.65 %5.71 %41,11914.3630.1063 %3,654.0
FixedReset Prem6.08 %5.10 %115,6133.29120.1065 %2,610.0
FixedReset Bank Non0.00 %0.00 %00.000-0.0453 %2,954.8
FixedReset Ins Non5.15 %5.82 %68,95414.12140.1890 %2,993.1
Performance Highlights
IssueIndexChangeNotes
CU.PR.FPerpetual-Discount-3.81 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 18.96 Evaluated at bid price : 18.96 Bid-YTW : 6.00 %
CU.PR.GPerpetual-Discount-2.55 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 19.10 Evaluated at bid price : 19.10 Bid-YTW : 5.95 %
IFC.PR.FInsurance Straight-2.29 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 22.13 Evaluated at bid price : 22.57 Bid-YTW : 5.87 %
GWO.PR.LInsurance Straight-2.09 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 23.14 Evaluated at bid price : 23.40 Bid-YTW : 6.05 %
MFC.PR.KFixedReset Ins Non-1.83 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 23.01 Evaluated at bid price : 24.15 Bid-YTW : 5.59 %
BIP.PR.FFixedReset Disc-1.69 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 23.07 Evaluated at bid price : 24.38 Bid-YTW : 6.14 %
PWF.PR.ZPerpetual-Discount-1.60 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 21.50 Evaluated at bid price : 21.50 Bid-YTW : 6.09 %
IFC.PR.IInsurance Straight-1.50 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 22.60 Evaluated at bid price : 23.00 Bid-YTW : 5.88 %
BIP.PR.EFixedReset Disc-1.29 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 23.24 Evaluated at bid price : 24.53 Bid-YTW : 6.18 %
CU.PR.EPerpetual-Discount-1.28 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 20.75 Evaluated at bid price : 20.75 Bid-YTW : 5.97 %
GWO.PR.IInsurance Straight1.19 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 19.48 Evaluated at bid price : 19.48 Bid-YTW : 5.80 %
CU.PR.DPerpetual-Discount1.38 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 21.35 Evaluated at bid price : 21.35 Bid-YTW : 5.80 %
MFC.PR.BInsurance Straight1.43 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 20.54 Evaluated at bid price : 20.54 Bid-YTW : 5.70 %
IFC.PR.EInsurance Straight1.44 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 22.96 Evaluated at bid price : 23.25 Bid-YTW : 5.60 %
SLF.PR.HFixedReset Ins Non1.59 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 21.15 Evaluated at bid price : 21.15 Bid-YTW : 5.89 %
GWO.PR.HInsurance Straight1.62 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 20.73 Evaluated at bid price : 20.73 Bid-YTW : 5.88 %
MFC.PR.MFixedReset Ins Non1.94 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 22.38 Evaluated at bid price : 23.14 Bid-YTW : 5.82 %
BN.PR.RFixedReset Disc2.02 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 7.07 %
CU.PR.JPerpetual-Discount2.54 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 20.56 Evaluated at bid price : 20.56 Bid-YTW : 5.84 %
SLF.PR.GFixedReset Ins Non2.56 %YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 18.05 Evaluated at bid price : 18.05 Bid-YTW : 6.10 %
Volume Highlights
IssueIndexShares
Traded
Notes
MFC.PR.QFixedReset Ins Non40,400YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 23.26 Evaluated at bid price : 24.68 Bid-YTW : 5.64 %
IFC.PR.AFixedReset Ins Non40,205YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 21.38 Evaluated at bid price : 21.38 Bid-YTW : 5.54 %
PWF.PR.KPerpetual-Discount35,363YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 5.99 %
MFC.PR.FFixedReset Ins Non18,472YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 6.10 %
FTS.PR.KFixedReset Disc13,800YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 21.59 Evaluated at bid price : 21.85 Bid-YTW : 5.91 %
PWF.PF.APerpetual-Discount13,800YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 19.27 Evaluated at bid price : 19.27 Bid-YTW : 5.94 %
There were 5 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
See TMX DataLinx: ‘Last’ != ‘Close’ and the posts linked therein for an idea of why these quotes are so horrible.
IssueIndexQuote Data and Yield Notes
CU.PR.EPerpetual-DiscountQuote: 20.75 – 23.54 Spot Rate : 2.7900 Average : 1.6380 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 20.75 Evaluated at bid price : 20.75 Bid-YTW : 5.97 %
CU.PR.FPerpetual-DiscountQuote: 18.96 – 21.75 Spot Rate : 2.7900 Average : 1.7067 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 18.96 Evaluated at bid price : 18.96 Bid-YTW : 6.00 %
GWO.PR.LInsurance StraightQuote: 23.40 – 25.00 Spot Rate : 1.6000 Average : 0.9310 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 23.14 Evaluated at bid price : 23.40 Bid-YTW : 6.05 %
IFC.PR.FInsurance StraightQuote: 22.57 – 23.87 Spot Rate : 1.3000 Average : 0.8673 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 22.13 Evaluated at bid price : 22.57 Bid-YTW : 5.87 %
GWO.PR.YInsurance StraightQuote: 19.30 – 21.00 Spot Rate : 1.7000 Average : 1.3066 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 5.86 %
CU.PR.GPerpetual-DiscountQuote: 19.10 – 20.20 Spot Rate : 1.1000 Average : 0.7137 YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2055-06-18 Maturity Price : 19.10 Evaluated at bid price : 19.10 Bid-YTW : 5.95 %

One comment June 18, 2025

[…] PerpetualDiscounts now yield 5.93%, equivalent to 7.71% interest at the standard conversion factor of 1.3x. Long corporates now yield 4.90%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now 280bp, a slight (and perhaps spurious) narrowing from the 285bp reported June 18 […]

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