Daily Commentary BY THE CURVE TEAM –

Daily Insights – Fed Changes Tune

1 December, 2021

Fed Change Tune

  • The Fed will will consider tapering QE quicker than planned at their next meeting in mid December.
  • Powell believes inflation should no longer be considered transitory, hence the change in tact.
  • As a result, the curve flattened. Two year US Treasury’s were up nearly 9 points and 10 years down 3 points to 1.47%.

Building Approvals

  • Fell 12.9% in October.
  • High rise approvals were down almost a third, whereas private sector houses were up almost 4.3%.
  • This indicates the end of HomeBuilder had little to do with the soft number and continues the volatility in the data.

Credit Roars On

  • Credit growth was 0.5% for October.
  • Business credit was up 0.5% and housing up 0.57%, with owner occupieds up 0.73%.

Josh Stewart

Associate - Money Markets