MNI ASIA OPEN: Difference in Fed Speaker Outlooks on Rates

EXECUTIVE SUMMARY

• MNI FED: Gov Miran: Appropriate Rates In 2.00-2.50% "Ballpark"
• MNI BRIEF: Fed's Musalem Sees Limited Room For More Rate Cuts
• MNI FED: Atlanta's Bostic Pencils In No More Cuts this Year, But Watching Data
• MNI FED: Cleveland's Hammack: Policy Very Mildly Restrictive, Concerns On More Cuts
• MNI US: Govt Shutdown Risk Spikes As Lawmakers Recess Without Funding Plan

US

MNI FED: Atlanta's Bostic Pencils In No More Cuts this Year, But Watching Data

Atlanta Fed President Bostic (non-2025/2026 FOMC voter) appears to have stuck to his pre-September Fed meeting outlook for just 1 cut this year, telling the WSJ in an interview that "I had one cut for this year. I didn't say the timing for that. So this could easily be the one cut. And so for that, I'm fine with it. I think moving forward, the data is going to be really important and here's what I would say. Forecasting is really hard these days and so I still have one cut down for the year. So that would be it."

MNI BRIEF: Fed's Musalem Sees Limited Room For More Rate Cuts

The Federal Reserve was justified in cutting interest rates last week but still-elevated inflation and a higher neutral rate mean the central bank might not have room to reduce borrowing cuts much further, St. Louis Fed President Alberto Musalem said Monday. "I believe there is limited room for easing further without policy becoming overly accommodative, and we should tread cautiously," Musalem said in prepared remarks for an event at the Brookings Institution.

MNI FED: Cleveland's Hammack: Policy Very Mildly Restrictive, Concerns On More Cuts

Cleveland Fed President Hammack (hawk, 2026 FOMC voter) sounds extremely cautious about making further cuts: "I am laser focused on inflation. And that's why to me, I think that we should be very cautious in removing monetary policy restriction, because I think it's important that we stay restrictive to bring inflation back down to target." She says she she has "one of the highest estimates" of the neutral rate on the Committee, and thinks policy is only "very mildly restrictive after last week's move", so a "very short distance to neutral".

MNI FED: Gov Miran: Appropriate Rates In 2.00-2.50% "Ballpark"

New Fed Governor Miran unsurprisingly argues for significantly lower policy interest rates in his first prepared remarks (link) since being appointed to the Board, calling current rates "very restrictive". The central basis of his argument is that the neutral rate has shifted lower, making immediate easing appropriate: "Because many r* estimates are based on empirical models requiring a great deal of time-series data, they can be backward-looking and slow to adjust. Moving too slowly to update a rapidly changing neutral rate raises the risk of policy mistakes....In my view, insufficiently accounting for the strong downward pressure on the neutral rate resulting from changes in border and fiscal policies is leading some to believe policy is less restrictive than it actually is."

NEWS

MNI US: Govt Shutdown Risk Spikes As Lawmakers Recess Without Funding Plan

The implied probability of a US government shutdown on October 1 spiked to nearly 70% after Congress departed for a week-long recess without a plan to fund the federal government. On Friday, the House passed a ‘clean’ CR to punt funding through November 21. Speaker Johnson (R-LA) then recessed the House until at least October 1, closing the door to new negotiations before the September 30 deadline. 

MNI ISRAEL: Fox-Hamas To Send Letter To Trump Calling For Ceasefire Guarantee

Fox News reports that Hamas has written a letter to US President Donald Trump, calling for his personal guarantee of a 60-day ceasefire in Gaza in exchange for the release of half of the remaining living hostages held by the group. Trey Yingst at Fox: "The letter is expected to be delivered to President Trump this week. Officials hope this could pause the war and jump start talks that stalled after Israeli strikes against Hamas in Doha, Qatar earlier this month." The offer does not appear to be anything materially new, with a similar deal on put on the table in March. 

US TSYS

MNI US TSYS: Fed Speakers: Difference of Opinions

• Treasuries reversed early support after comments from Fed Bostic: sees little reason for additional rate cuts "for now", labor market "not in crisis": "forecasting is really hard these days and so I still have one cut down for the year. So that would be it."
• StL Fed Musalem: "I believe there is limited room for easing further without policy becoming overly accommodative, and we should tread cautiously," Musalem said in prepared remarks for an event at the Brookings Institution.
• Conversely, new Fed Governor Miran (Mr. Low Dot) unsurprisingly argues for significantly lower policy interest rates (2-2.5% "ballpark) in his first prepared remarks since being appointed to the Board, calling current rates "very restrictive".
• Projected rate cut pricing cooled slightly vs. early morning levels (*): Oct'25 at -22.3bp (-22.9bp), Dec'25 at -43.1bp (-44.6bp), Jan'26 at -54.1bp (-56.2bp), Mar'26 at -66bp (-69.1bp).
• Currently, the Dec'25 10Y trades -2.5 at 112-21.5 (yld 4.1467% +.0193) vs. 112-21.5 low, modest volumes (TYZ5 1.03M); technical resistance well above at 113-29 (High Sep 11 and the bull trigger); Support at 112-15+ (High Aug 5 and 14). Curves mixed: 2s10s -1.430 at 53.948, 5s30s +0.067 at 106.406.
• Look ahead to Tuesday's session: S&P Global flash PMIs, Current Account Balance and regional Fed data. Fed Chair Powell speaks about the economy at 1235ET after Bowman's outlook (0900ET) and Bostic podcast (1000ET).

OVERNIGHT DATA

MNI US DATA: Consumer Expenditures Report Delayed, But CPI Weights To Print As Usual

The Bureau of Labor Statistics announces that "The 2024 Consumer Expenditures (CE) news release scheduled to be released on September 23, 2025, is rescheduled to October 30, 2025, at 10:00 AM ET." The BLS announced a delay to the release last week with no explanation, but this confirms that the delay isn't indefinite.

• The Bureau explains the reason for the delay: "In 2024, BLS implemented the second phase of a questionnaire redesign to reduce respondent burden and improve data quality. In preparing the release, BLS discovered a discrepancy in the tabulation of some of the items impacted by the questionnaire change and is taking additional time to validate the data to ensure a high-quality product."

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA up 66.27 points (0.14%) at 46381.54
S&P E-Mini Future up 27.5 points (0.41%) at 6749.5
Nasdaq up 157.5 points (0.7%) at 22788.98
US 10-Yr yield is up 1.9 bps at 4.1467%
US Dec 10-Yr futures are down 2/32 at 112-22
EURUSD up 0.0053 (0.45%) at 1.18
USDJPY down 0.21 (-0.14%) at 147.73
WTI Crude Oil (front-month) down $0.04 (-0.06%) at $62.64
Gold is up $62.82 (1.7%) at $3748.16

European bourses closing levels:
EuroStoxx 50 down 16.37 points (-0.3%) at 5442.05
FTSE 100 up 10.01 points (0.11%) at 9226.68
German DAX down 112.36 points (-0.48%) at 23527.05
French CAC 40 down 23.48 points (-0.3%) at 7830.11

US TREASURY FUTURES CLOSE

3M10Y +5.326, 19.92 (L: 12.957 / H: 20.63)
2Y10Y -1.22, 54.158 (L: 53.737 / H: 56.28)
2Y30Y -1.078, 115.942 (L: 115.489 / H: 119.447)
5Y30Y -0.032, 106.307 (L: 105.989 / H: 109.135)
Current futures levels:
Dec 2-Yr futures down 1.625/32 at 104-7.875 (L: 104-07.75 / H: 104-10.625)
Dec 5-Yr futures down 1.5/32 at 109-11.5 (L: 109-11 / H: 109-16.5)
Dec 10-Yr futures down 2/32 at 112-22 (L: 112-21 / H: 112-28.5) 
Dec 30-Yr futures down 5/32 at 116-6 (L: 116-01 / H: 116-19)
Dec Ultra futures down 7/32 at 119-15 (L: 119-06 / H: 119-31)

MNI US 10YR FUTURE TECHS: (Z5) Corrective Pullback

• RES 4: 114-15  1.0% 10-dma envelope
• RES 3: 114-10   High Apr 7 (cont.)
• RES 2: 114-00   Round number resistance
• RES 1: 113-29   High Sep 11 and the bull trigger
• PRICE:‌‌ 112-22 @ 1548T Sep 20
• SUP 1: 112-21/15+ Intraday Low / High Aug 5  and 14
• SUP 2: 112-08+ 50-day EMA
• SUP 3: 111-13+ Low Aug 18 and a key support 
• SUP 4: 110-25   Low Aug 1 

The pullback in Treasury futures from their recent highs appear corrective. Price has moved through the 20-day EMA, at 112-28+. The break signals scope for a deeper retracement and attention turns to the 50-day EMA, at 112-08+ and the next key support. Moving average studies remain in a bull mode position, highlighting a dominant uptrend. The bull trigger has been defined at 113-29, the Sep 11 high.

SOFR FUTURES CLOSE

Current White pack (Dec 25-Sep 26):
Dec 25 -0.025 at 96.320
Mar 26 -0.035 at 96.530
Jun 26 -0.035 at 96.755
Sep 26 -0.035 at 96.895
Red Pack (Dec 26-Sep 27) -0.03 to -0.02
Green Pack (Dec 27-Sep 28) -0.015 to -0.01
Blue Pack (Dec 28-Sep 29) -0.005 to steady
Gold Pack (Dec 29-Sep 30) -0.005 to steady

REFERENCE RATES (PRIOR SESSION)
​​​​​​​
US TSYS: Repo Reference Rates

• Secured Overnight Financing Rate (SOFR): 4.14% (+0.00), volume: $2.881T
• Broad General Collateral Rate (BGCR): 4.11% (+0.00), volume: $1.148T
• Tri-Party General Collateral Rate (TCR): 4.11% (+0.00), volume: $1.118T
• (rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

• Daily Effective Fed Funds Rate: 4.08% (+0.00), volume: $95B
• Daily Overnight Bank Funding Rate: 4.08% (+0.00), volume: $191B

FED Reverse Repo Operation

RRP usage drifts up to $14.173B with 15 counterparties this afternoon from $11.363B Friday - lowest levels since early April 2021. Compared to this year's high usage of $460.731B occurred on June 30.

MNI PIPELINE: Corporate Bond Update: $5B Broadcom 3Pt Launched

• Date $MM Issuer (Priced *, Launch #)
• 09/22 $5B #Broadcom $1B 5Y +53, $2.25B +10Y +68, $1.75B +12Y +78
• 09/22 $4.5B #Dell $750M +3Y +58, $1.25B +5Y +80, $1.25B 7Y +90, $1.25B +10Y +100
• 09/22 $1.5B *Royal Caribbean 10Y +125
• 09/22 $1.5B #CBA $750M each: 5Y +45, 5Y SOFR+78
• 09/22 $1.2B #Aercap Ireland $600M each 5Y +75, 10Y +97
• 09/22 $1B #Embraer Netherlands +12Y +130
• 09/22 $900M #AEP Texas $150M 2034 Tap +97, $750M 30Y +112
• 09/22 $700M Mineral Resources 5.5NC2.5 7.25%a
• 09/22 $500M #Isbank WNG 10.5NC5.5 7.375%
• 09/22 $500M Science Applications 8NC3 5.875%a
• 09/22 $Benchmark Korea National Oil 3Y fix/SOFR, 5Y

MNI BONDS: EGBs-GILTS CASH CLOSE: Mixed Curves Ahead Of PMIs

European yields were little changed Monday, with longer-end Gilts slightly outperforming their German counterparts.

• Yields opened the session a little higher coming in from the weekend, carrying on from a bond-bearish tone late last week, but gradually descended to session lows by mid-day London time with few immediate macro/headline movers in evidence.
• 10Y Gilt yields briefly hit a post-Sept 4 high (4.724%) but otherwise trade was largely within last week's ranges.
• Comments from BOE's Pill and Bailey didn't prove impactful. MNI's Macro team noted however that all seven of the non-dissenting MPC members are due to make public appearances before the end of September.
• On the day, the UK curve bull flattened, with Germany's twist steepening.
• Periphery/semi-core EGB spreads widened slightly. BTP spreads were a little wider, despite Friday's one-notch rating upgrade to Italy from Fitch; France's were little changed following Friday's one-notch downgrade from Morningstar DBRS.
• Tuesday's schedule includes flash September PMIs, and another appearance by BOE's Pill.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 0.5bps at 2.018%, 5-Yr is down 0.6bps at 2.32%, 10-Yr is unchanged at 2.748%, and 30-Yr is up 2bps at 3.357%.
• UK: The 2-Yr yield is down 0.2bps at 3.98%, 5-Yr is down 0.2bps at 4.13%, 10-Yr is down 0.3bps at 4.712%, and 30-Yr is down 1.1bps at 5.548%.
• Italian BTP spread up 1.2bps at 79.7bps / Spanish up 0.3bps at 55.1bps

MNI FOREX: USD Index Eases Off Recovery Highs, SEK Outperforms Ahead of Riksbank

• The USD index tracks around 0.25% lower on Monday, easing from the overnight peak that saw the index print a fresh recovery high at 97.82. Markets are trading with a subdued tone amid a lighter economic calendar to start the week, with central bank speakers providing little to boost volatility.
• The EUR outperforms, rising around 0.35% against the dollar to 1.1785. Large option expiries for EURUSD between the 1.17/18 mark might define the short-term range, following the post-Fed volatility last week that saw the pair reverse from 1.1919 cycle highs. Support to watch is 1.1667. the 50-day EMA.
• Last Thursday’s advance for EURJPY resulted in a breach of 173.97 resistance, the Jul 28 high and bull trigger. The cross has been consolidating above 174.00 for much of the session, bolstering the medium-term uptrend. Sights are on 174.86 next, a Fibonacci projection, before the 2024 highs which reside at 175.43, a key medium-term resistance.
• SEK outperforms the G10 basket Monday, seemingly trading as a high beta Euro with no obvious tailwinds from the equity/risk sentiment or rate differential channels. Focus of course remains on tomorrow's Riksbank decision, which is a very close call between a hold and a 25bp cut.
• For NZDUSD, the sharp reversal from 0.6000 to current spot levels renews the focus on a significant pivot point at 0.5800, which coincides with the 50% retracement of the year’s range. Below 0.5800, 0.5728 and 0.5636 would be the most obvious targets for a deeper selloff.
• Eurozone and US flash PMIs for September and the Riksbank decision highlight Tuesday’s calendar.
• LATAM: Argentinian Peso Continues To Outperform As US Promises Forceful Action
  • The Argentinian peso continues to outperform on Monday after the US said it will take “large and forceful” action to support the country. USDARS fell by over 2.5%. Local equities are also up by over 6% and the country’s dollar bonds have rallied sharply, with Argentina '35s up more than 5pts. US Treasury Secretary Bessent said that the US won’t take action until after the meeting between Presidents Trump and Milei tomorrow. He also said that he had spoken with IMF MD Georgieva about Argentina and is satisfied with their positions.

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
23/09/2025	0715/0915	**	FR	S&P Global Services PMI (p)
23/09/2025	0715/0915	**	FR	S&P Global Manufacturing PMI (p)
23/09/2025	0730/0930	***	SE	Riksbank Interest Rate Decison
23/09/2025	0730/0930	**	DE	S&P Global Services PMI (p)
23/09/2025	0730/0930	**	DE	S&P Global Manufacturing PMI (p)
23/09/2025	0800/1000	**	EU	S&P Global Services PMI (p)
23/09/2025	0800/1000	**	EU	S&P Global Manufacturing PMI (p)
23/09/2025	0800/1000	**	EU	S&P Global Composite PMI (p)
23/09/2025	0830/0930	***	GB	S&P Global Manufacturing PMI flash
23/09/2025	0830/0930	***	GB	S&P Global Services PMI flash
23/09/2025	0830/0930	***	GB	S&P Global Composite PMI flash
23/09/2025	0900/1000	**	GB	Gilt Outright Auction Result
23/09/2025	0900/1000		GB	BOE Pill Fireside Chat At Pictet Research Institute Symposium
23/09/2025	1000/1100	**	GB	CBI Industrial Trends
23/09/2025	1230/0830	*	US	Current Account Balance
23/09/2025	1230/0830	**	US	Philadelphia Fed Nonmanufacturing Index
23/09/2025	1255/0855	**	US	Redbook Retail Sales Index
23/09/2025	1300/0900		US	Fed Governor Michelle Bowman
23/09/2025	1345/0945	***	US	S&P Global Manufacturing Index (Flash)
23/09/2025	1345/0945	***	US	S&P Global Services Index (flash)
23/09/2025	1400/1000	**	US	Richmond Fed Survey
23/09/2025	1400/1000	***	US	NAR existing home sales
23/09/2025	1400/1000		US	Atlanta Fed's Raphael Bostic
23/09/2025	1420/1620		EU	ECB Cipollone In Bloomberg Fireside Chat
23/09/2025	1635/1235		US	Fed Chair Jay Powell
23/09/2025	1700/1300	*	US	US Treasury Auction Result for 2 Year Note
23/09/2025	1815/1415		CA	BOC Governor Macklem speech in Saskatoon
24/09/2025	2301/0001	*	GB	Brightmine pay deals for whole economy
24/09/2025	0030/0930	**	JP	Jibun Bank Flash Japan PMI
24/09/2025	0130/1130	***	AU	CPI Inflation Monthly