Leadership of the Fed
- In the face of a potential recession, will the Fed have to indulge the free-falling US interest rate market with a cut at its meeting in just two weeks' time?
- The extreme drop in yields in the past few trading sessions (-37bp in 8 days) suggests that these moves are driven by our friend short gamma, rather than anything more fundamentally awry with the US economy
- Unfortunately we are in a world where prices are used to estimate prices. So if a US 25bp rate . . .