Rates on the Run | Ep. 30 - October 2026

What This Video Is About

The video discusses the Federal Reserve's latest meeting, where they decided to keep interest rates on hold, and the implications for the fixed income market. The meeting saw two dissents, with Cleveland President Beth Hammock and Fed Governor Lisa Cook voting in favor of a 25 basis point hike.

Major Ideas Discussed

• The Federal Reserve kept interest rates on hold at 3.75% to 4%, with a high likelihood of a hike in December, as indicated by rate probabilities, which show over 94% chance of a hike priced in.
• The yield curve has seen significant moves, with the front end moving up and the back end coming down slightly, and the move index, which measures interest rate volatility, has increased, reaching levels above 110.
• Despite the challenges in the fixed income market, there are opportunities to be found, particularly in the mortgage market, agency MBS, and Treasury option income strategies, which are attractive areas to consider due to the higher starting point of yields.
• The Fed's statement emphasized that inflation remains elevated, and the committee will restore price stability, indicating that there is still more work to be done to combat inflation.

What to Watch Next

The rate probabilities, yield curve, and volatility will continue to be closely watched, and investors should monitor the fixed income market for opportunities, particularly in the areas mentioned, as the market continues to be volatile, with rates peaking at multi-decade highs.