Chaigneau: Risk Assets Less Buoyant With Hawkish Fed
Traders see one-in-three odds of higher U.S. interest rates next month as more Federal Reserve officials joined the chorus arguing the case for policy tightening before Chair Janet Yellen speaks Friday. Implied probability in futures markets of 32 percent is double what it was two weeks ago, and up from zero after the U.K. voted to exit the European Union in June. Two-year Treasury yields, which are more sensitive than longer maturities to the monetary policy outlook, were poised to rise for a second week after Kansas City Fed President Esther George reiterated her call that higher rates are warranted, while Dallas Fed chief Robert Kaplan said “the case is strengthening” for another increase. Societe Generale Head of Rates & FX Strategy Vincent Chaigneau discusses with "On the Move" hosts Manus Cranny in London and Caroline Hyde in Berlin.
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