FED: Chicago's Goolsbee: Uneasy With Too Much Cut Frontloading

RBC earlier today advised receiving Dec 25 BoE vs paying ECB. 

• Medium conviction (50k/sdev) with entry level -1bp, target -20bp and stop loss 10bp.
• “Market pricing is almost identical for further rate cuts from the ECB and BoE at around 10bp for the rest of the year.”
• “We strongly believe out of the two central banks the BoE is more likely to cut again and therefore like the risk/reward in paying the ECB December meeting and receiving the BoE December meeting. We particularly see scope for the BoE market pricing to shift, if there is an easing in some of the UK data.”
• “A spread trade provides protection against a strong global risk-on/off move.” They only see the ECB cutting this year if there is a global shock.
• “We look to take profit at -20bp, which would likely reflect the scenario where a full BoE cut is almost fully priced and ECB market pricing moves towards 0bp. We think this is very possible if we have a couple of dovish data prints out of the UK. We set a stop loss at 10bp, to cover us in the situation where the market momentum behind a further ECB cut builds, but the BoE drifts closer to no cuts.”

Republicans are less likely than Democrats to see inflation as a 'very serious' problem, according to a new YouGov Survey, with GOP voters registering a sharp decline in inflation concerns since August 2024.

• YouGov: “Republicans are much less likely than they were in August 2024 to see many of the problems asked about as very serious. 48% say inflation is a very serious problem, down from 89% who said this a year ago. They also are far less likely to see election fraud (33% vs. 59%) and unemployment (19% vs. 40%) as very serious problems now as they were a year ago.”
• YouGov continues: “For Democrats, it’s the opposite — they’re more likely than they were a year ago to perceive many issues as serious problems. They are more likely now than in August 2024 to describe as very serious problems inflation (71% vs. 45%), lack of public transportation (35% vs. 26%), and corruption (72% vs. 51%).”
• According to Silver Bulletin, inflation remains Trump's weakest issue with voters. Per SB's aggregated polling, Trump has a -25% net approval on inflation, compared with -15% on trade, -12% on the economy, and -3.5% on immigration.  

Figure 1: “How serious of a problem do you [Republicans] think the following are in the United States? (% who say "a very serious problem)”

Source: YouGov

RRP usage retreats to $28.574B this afternoon from $47.567B yesterday -- compares to $22.344B on Tuesday, Aug 19 - lowest since April 5, 2021. Total number of counterparties at 16. This year's high usage of $460.731B on June 30.