FED: Instant Answers: Fed Split On Hike In '26; Median 3.6% In '27
- Federal Funds Rate Range Maximum: 3.75%
- Number of dissenters in favor of a hike: ZERO; vote unanimous, 12-0
- Number of dissenters in favor of a cut: ZERO
- Does the statement keep the phrase "the extent and timing of additional adjustments"?: NO
- Does the statement add an explicit tightening (not neutral) bias on rates? NO
- Median Projection of Fed Funds Rate at End of 2026: 3.8%
- Median Projection of Fed Funds Rate at End of 2027: 3.6%
- Median Projection of Fed Funds Rate at End of 2028: 3.4%
- Median Longer Run Projection of Fed Funds Rate: 3.1%
- Number of 2026 Dots > 3.375%: 17
- Number of 2026 Dots > 3.625%: 9
- Number of 2026 Dots > 3.875%: 6
- Number of 2026 Dots < 3.625%: 1
- Total 2026 Dots: 18
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EURGBP TECHS: Bullish Short-Term Set-Up
- RES 4: 0.8789 High Feb 27 and key resistance
- RES 3: 0.8747 76.4% retracement of the Feb 27 - Mar 16 bear leg
- RES 2: 0.8742 High Mar 31 and Apr 1 and a bull trigger
- RES 1: 0.8728 High May 15
- PRICE: 0.8690 @ 16:25 BST May 18
- SUP 1: 0.8676 50-day EMA and a S/T pivot level
- SUP 2: 0.8648 Low May 13
- SUP 3: 0.8610 Low Mar 16 and the bear trigger
- SUP 4: 0.8597 Low Aug 14
Last week’s rally in EURGBP undermines a recent bearish theme. The cross is trading above the 50-day EMA - at 0.8678 - and this signals scope for a stronger short-term recovery. The next key resistance to watch is 0.8742, the Mar 31 and Apr 1 high. Clearance of this hurdle would strengthen a bullish theme. The 50-day EMA is seen as an important short-term pivot level. A clear break of it would highlight an early reversal signal.
PIPELINE: Corporate Bond Update: $6B Merck 7Pt Launched
- Date $MM Issuer (Priced *, Launch #)
- 05/18 $6B #Merck $1B 2Y +25, $500N 2Y SOFR+37, $500M 5Y +40, $1B 7Y +53, $1.5B 10Y +63, $500M 20Y +63, $1B 30Y +73
- 05/18 $2.25B #Schwab $1B 4NC3 +58, $1.25B 11NC10 +87
- 05/18 $1.25B #Northwestern Mutual 30Y +95
- 05/18 $1B #Chubb 10Y +72
- 05/18 $500M #American Water 3Y +50
- 05/18 $500M #RGA Global Funding 5Y +88
- Expected this week:
- 05/19 $1B Munifin WNG 5Y SOFR +38a
- 05/19 $Benchmark ADB 5Y SOFR+32a
- 05/19 $Benchmark OKB 3Y SOFR+27a
- 05/20 $750M RR Donnelley 5NC2
US: Preisdent Trump Loses Ground w/Hispanic Voters
A survey from the Pew Research Center found, “A clear majority of President Donald Trump’s 2024 voters continue to approve of [Trump] ... [but] his standing has dropped more sharply among his Hispanic voters.
- The survey notes 66% of Latino Trump voters approve of his job performance. That’s down 27 percentage points since the start of his second term. Meanwhile, the share of non-Hispanic Trump voters who approve of his performance has fallen by 16 points, to 79%...”
- Nate Cohen at NYT reports on a new Siena College Poll showing Trump approval dropping to a second-term low, “it’s often been said that President Trump’s support has a low ceiling but a high floor,” but that "is starting to be put to the test.”
- Cohen writes, “While it’s too soon to say whether [Iran/gas prices] will ultimately break [Trump's] floor, the poll leaves no doubt that these issues could pull his approval ratings down even lower. Just 28 percent of voters approve of his handling of the cost of living, and only 31 percent approve of his handling of the war. Just 30 percent say he made the “right decision” in choosing to attack Iran.”
- Silver Bulletin noted on May 17, “Trump’s net approval is -20.6. And about 48 percent of Americans strongly disapprove of Trump’s job performance. These numbers are partially why Democrats are on track for a strong performance in the midterms…”
Figure 1: “% who approve of the way Donald Trump is handling his job as president”
Source: Pew Research Center
