{"id":45218,"date":"2023-05-03T19:30:57","date_gmt":"2023-05-04T00:30:57","guid":{"rendered":"https:\/\/prefblog.com\/?p=45218"},"modified":"2023-05-03T19:30:57","modified_gmt":"2023-05-04T00:30:57","slug":"may-3-2023","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=45218","title":{"rendered":"May 3, 2023"},"content":{"rendered":"

The Fed released its FOMC Statement<\/a> on schedule:<\/p>\n

Economic activity expanded at a modest pace in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated.<\/p>\n

The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.<\/p>\n

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5 to 5-1\/4 percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.<\/p>\n

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.<\/p>\n

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.<\/p>\n

For media inquiries, please email media@frb.gov or call 202-452-2955.<\/p><\/blockquote>\n

The NYT points out<\/a>:<\/p>\n

But in their statement announcing the decision, policymakers also indicated that they will watch to see whether future rate moves are necessary. That marks a shift in stance: For months, they had assumed that additional changes would be needed.<\/p>\n

The change opens the door to a possible pause in Fed interest rate increases, but it also leaves central bankers with options. Officials could raise rates by more if the economy and inflation prove hot.
\n…<\/b>
\nInvestor bets on where interest rates go from here are firmly tilted toward a pause and then lower interest rates later in the year. One calculation put the likelihood the Fed holds off changing interest rates when it next meets in June at 80 percent.
\n…<\/b>
\nStocks rose after the Fed raised rates and omitted previous language in its statement that signaled more rate increases to come, ushering in the pause investors had hoped for. The S&P 500 rose 0.4 percent.
\n…<\/b>
\nThe yield on two-year government bonds, which are sensitive to changes in interest rates, latched on to the potential pause, falling to 3.93 percent.
\n…<\/b>
\nCutting interest rates this year is \u201cnot in our forecast\u201d says Powell, in response to a question about investors already pricing in swift cuts to interest rates as soon as September.
\n…<\/b>
\nThe S&P 500 skidded at the end of Powell\u2019s press conference, down 0.5 percent, having initially reacted to the Fed\u2019s policy announcement positively. Investors appeared to react to Powell repeating that the central bank does not expect to cut interest rates this year, with interest rates remaining higher for longer weighing on the market.<\/p><\/blockquote>\n

PerpetualDiscounts now yield 6.24%, equivalent to 8.11% interest at the standard equivalency factor of 1.3x. Long corporates<\/a> yielded 4.87% on 2023-4-28 and since then the closing price has changed from 15.38 to 15.47, an increase of 59bp in price, with a Duration of 12.42 (BMO doesn’t specify whether this is Macaulay or Modified Duration; I will assume Modified) which implies a decrease in yield of about 5bp since 4\/28 to 4.82%, so the pre-tax interest-equivalent spread (in this context, the \u201cSeniority Spread\u201d) has widened to about 330bp from the 315bp reported April 26<\/a>.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref\u2122 Preferred Indices
\nThese values reflect the December 2008 revision of the HIMIPref\u2122 Indices<\/strong>
\nValues are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
\nCurrent
\nYield
\n(at bid)<\/td>\n		Median
\nYTW<\/td>\n		Median
\nAverage
\nTrading
\nValue<\/td>\n		Median
\nMod Dur
\n(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.3756 %<\/td>\n2,294.0<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.3756 %<\/td>\n4,399.9<\/td>\n<\/tr>\n
Floater<\/td>\n9.82 %<\/td>\n10.00 %<\/td>\n34,309<\/td>\n9.50<\/td>\n2<\/td>\n-0.3756 %<\/td>\n2,535.7<\/td>\n<\/tr>\n
OpRet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2204 %<\/td>\n3,341.0<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.03 %<\/td>\n7.47 %<\/td>\n44,256<\/td>\n2.58<\/td>\n7<\/td>\n-0.2204 %<\/td>\n3,989.9<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2204 %<\/td>\n3,113.1<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.7330 %<\/td>\n2,751.8<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n6.20 %<\/td>\n6.24 %<\/td>\n49,193<\/td>\n13.58<\/td>\n34<\/td>\n-0.7330 %<\/td>\n3,000.7<\/td>\n<\/tr>\n
FixedReset Disc<\/td>\n5.80 %<\/td>\n7.68 %<\/td>\n87,648<\/td>\n12.00<\/td>\n63<\/td>\n0.0061 %<\/td>\n2,136.4<\/td>\n<\/tr>\n
Insurance Straight<\/td>\n6.06 %<\/td>\n6.14 %<\/td>\n69,317<\/td>\n13.68<\/td>\n19<\/td>\n0.0746 %<\/td>\n2,967.1<\/td>\n<\/tr>\n
FloatingReset<\/td>\n10.45 %<\/td>\n10.95 %<\/td>\n50,011<\/td>\n8.79<\/td>\n2<\/td>\n-0.3377 %<\/td>\n2,395.2<\/td>\n<\/tr>\n
FixedReset Prem<\/td>\n6.94 %<\/td>\n6.56 %<\/td>\n346,244<\/td>\n12.82<\/td>\n1<\/td>\n-0.0790 %<\/td>\n2,327.4<\/td>\n<\/tr>\n
FixedReset Bank Non<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0061 %<\/td>\n2,183.8<\/td>\n<\/tr>\n
FixedReset Ins Non<\/td>\n5.96 %<\/td>\n7.33 %<\/td>\n79,886<\/td>\n12.09<\/td>\n11<\/td>\n0.0463 %<\/td>\n2,339.0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
CU.PR.F<\/td>\nPerpetual-Discount<\/td>\n-4.09 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.99
\nEvaluated at bid price : 17.99
\nBid-YTW : 6.26 %<\/td>\n<\/tr>\n
TRP.PR.B<\/td>\nFixedReset Disc<\/td>\n-3.68 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 10.22
\nEvaluated at bid price : 10.22
\nBid-YTW : 9.76 %<\/td>\n<\/tr>\n
TRP.PR.C<\/td>\nFixedReset Disc<\/td>\n-2.40 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 10.99
\nEvaluated at bid price : 10.99
\nBid-YTW : 9.38 %<\/td>\n<\/tr>\n
TD.PF.K<\/td>\nFixedReset Disc<\/td>\n-2.32 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 20.25
\nEvaluated at bid price : 20.25
\nBid-YTW : 7.08 %<\/td>\n<\/tr>\n
CU.PR.D<\/td>\nPerpetual-Discount<\/td>\n-1.92 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 19.80
\nEvaluated at bid price : 19.80
\nBid-YTW : 6.20 %<\/td>\n<\/tr>\n
POW.PR.C<\/td>\nPerpetual-Discount<\/td>\n-1.72 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 23.15
\nEvaluated at bid price : 23.41
\nBid-YTW : 6.25 %<\/td>\n<\/tr>\n
CU.PR.E<\/td>\nPerpetual-Discount<\/td>\n-1.63 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 19.86
\nEvaluated at bid price : 19.86
\nBid-YTW : 6.18 %<\/td>\n<\/tr>\n
TD.PF.J<\/td>\nFixedReset Disc<\/td>\n-1.57 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 21.64
\nEvaluated at bid price : 22.00
\nBid-YTW : 6.67 %<\/td>\n<\/tr>\n
MFC.PR.L<\/td>\nFixedReset Ins Non<\/td>\n-1.50 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 16.45
\nEvaluated at bid price : 16.45
\nBid-YTW : 8.01 %<\/td>\n<\/tr>\n
PWF.PR.F<\/td>\nPerpetual-Discount<\/td>\n-1.25 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 21.25
\nEvaluated at bid price : 21.25
\nBid-YTW : 6.23 %<\/td>\n<\/tr>\n
CU.PR.G<\/td>\nPerpetual-Discount<\/td>\n-1.15 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 18.50
\nEvaluated at bid price : 18.50
\nBid-YTW : 6.09 %<\/td>\n<\/tr>\n
IFC.PR.C<\/td>\nFixedReset Disc<\/td>\n-1.13 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.55
\nEvaluated at bid price : 17.55
\nBid-YTW : 7.57 %<\/td>\n<\/tr>\n
BN.PR.X<\/td>\nFixedReset Disc<\/td>\n1.19 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 14.50
\nEvaluated at bid price : 14.50
\nBid-YTW : 8.48 %<\/td>\n<\/tr>\n
CM.PR.Y<\/td>\nFixedReset Disc<\/td>\n1.29 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 23.01
\nEvaluated at bid price : 23.50
\nBid-YTW : 7.07 %<\/td>\n<\/tr>\n
CU.PR.C<\/td>\nFixedReset Disc<\/td>\n1.31 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 19.38
\nEvaluated at bid price : 19.38
\nBid-YTW : 7.04 %<\/td>\n<\/tr>\n
NA.PR.W<\/td>\nFixedReset Disc<\/td>\n1.37 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.00
\nEvaluated at bid price : 17.00
\nBid-YTW : 7.69 %<\/td>\n<\/tr>\n
PWF.PR.T<\/td>\nFixedReset Disc<\/td>\n1.38 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.69
\nEvaluated at bid price : 17.69
\nBid-YTW : 7.74 %<\/td>\n<\/tr>\n
CU.PR.I<\/td>\nFixedReset Disc<\/td>\n1.59 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2025-12-01
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.10
\nBid-YTW : 5.90 %<\/td>\n<\/tr>\n
GWO.PR.N<\/td>\nFixedReset Ins Non<\/td>\n1.90 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 12.33
\nEvaluated at bid price : 12.33
\nBid-YTW : 8.05 %<\/td>\n<\/tr>\n
BMO.PR.E<\/td>\nFixedReset Disc<\/td>\n2.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 20.95
\nEvaluated at bid price : 20.95
\nBid-YTW : 6.93 %<\/td>\n<\/tr>\n
BN.PF.A<\/td>\nFixedReset Disc<\/td>\n3.37 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 18.09
\nEvaluated at bid price : 18.09
\nBid-YTW : 8.46 %<\/td>\n<\/tr>\n
RY.PR.M<\/td>\nFixedReset Disc<\/td>\n4.37 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.19
\nEvaluated at bid price : 17.19
\nBid-YTW : 7.69 %<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
\nTraded<\/td>\n		Notes<\/td>\n<\/tr>\n
RY.PR.J<\/td>\nFixedReset Disc<\/td>\n82,400<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 18.03
\nEvaluated at bid price : 18.03
\nBid-YTW : 7.66 %<\/td>\n<\/tr>\n
MFC.PR.M<\/td>\nFixedReset Ins Non<\/td>\n59,800<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 16.80
\nEvaluated at bid price : 16.80
\nBid-YTW : 8.02 %<\/td>\n<\/tr>\n
TD.PF.A<\/td>\nFixedReset Disc<\/td>\n29,600<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.07
\nEvaluated at bid price : 17.07
\nBid-YTW : 7.64 %<\/td>\n<\/tr>\n
BN.PF.G<\/td>\nFixedReset Disc<\/td>\n28,200<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 14.90
\nEvaluated at bid price : 14.90
\nBid-YTW : 9.39 %<\/td>\n<\/tr>\n
CM.PR.S<\/td>\nFixedReset Disc<\/td>\n19,660<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 21.52
\nEvaluated at bid price : 21.52
\nBid-YTW : 6.65 %<\/td>\n<\/tr>\n
FTS.PR.G<\/td>\nFixedReset Disc<\/td>\n16,500<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.90
\nEvaluated at bid price : 17.90
\nBid-YTW : 7.49 %<\/td>\n<\/tr>\n
There were 8 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Wide Spread Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nQuote Data and Yield Notes<\/td>\n<\/tr>\n
TRP.PR.E<\/td>\nFixedReset Disc<\/td>\nQuote: 14.95 – 17.45
\nSpot Rate : 2.5000
\nAverage : 1.7726<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 14.95
\nEvaluated at bid price : 14.95
\nBid-YTW : 8.95 %<\/td>\n<\/tr>\n

MFC.PR.N<\/td>\nFixedReset Ins Non<\/td>\nQuote: 16.35 – 17.60
\nSpot Rate : 1.2500
\nAverage : 0.8370<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 16.35
\nEvaluated at bid price : 16.35
\nBid-YTW : 8.08 %<\/td>\n<\/tr>\n

BIK.PR.A<\/td>\nFixedReset Disc<\/td>\nQuote: 22.25 – 23.00
\nSpot Rate : 0.7500
\nAverage : 0.4141<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 21.78
\nEvaluated at bid price : 22.25
\nBid-YTW : 8.00 %<\/td>\n<\/tr>\n

CU.PR.F<\/td>\nPerpetual-Discount<\/td>\nQuote: 17.99 – 19.01
\nSpot Rate : 1.0200
\nAverage : 0.6851<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.99
\nEvaluated at bid price : 17.99
\nBid-YTW : 6.26 %<\/td>\n<\/tr>\n

IFC.PR.C<\/td>\nFixedReset Disc<\/td>\nQuote: 17.55 – 18.49
\nSpot Rate : 0.9400
\nAverage : 0.6245<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 17.55
\nEvaluated at bid price : 17.55
\nBid-YTW : 7.57 %<\/td>\n<\/tr>\n

TD.PF.J<\/td>\nFixedReset Disc<\/td>\nQuote: 22.00 – 22.75
\nSpot Rate : 0.7500
\nAverage : 0.5396<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-05-03
\nMaturity Price : 21.64
\nEvaluated at bid price : 22.00
\nBid-YTW : 6.67 %<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The Fed released its FOMC Statement on schedule: Economic activity expanded at a modest pace in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-45218","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/45218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45218"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/45218\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}