FED: Waller Had A “Strong” Fed Chair Interview But Little Reaction
- CNBC reports (link) senior administration officials as saying Fed Governor Waller had a “strong interview” for the next Fed Chair role “in which the two discussed the labor market in depth and how to jumpstart job creation”.
- The officials added that Blackrock’s Rick Rieder will be interviewed at Mar-a-Lago for the Fed chair job the last week of the year, whilst Fed Governor and Vice Chair for Supervision Michelle Bowman is no longer a candidate for the job.
- Bowman had long been a far-outsider for the role.
- Polymarket betting shows little material change in the running order, with NEC’s Hassett still a clear favorite (56%) over Warsh (21%), Waller (14% vs 11% ahead of the headlines) and Rieder (7% vs 2%).
- The relatively limited reaction compared with what might have been seen a few weeks ago comes after various reports on different candidates since then.
- Trump yesterday said I think Chris Waller is great and also that every one of the three or four candidates would be great. Latest timing is that he plans to make the Fed Chair announcement over the next couple weeks.
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US TSY FUTURES: December'25-March'26 Roll Update: Early 5Y Lead
The latest Tsy quarterly futures roll volumes for December'25 to March'26 outlined below. Percentage complete still in the single digits ahead the "First Notice" date of Friday, November 28. Current roll details:
- TUZ5/TUH6 appr 13,400 from -5.88 to -5.62, -5.88 last; 5% complete
- FVZ5/FVH6 appr 172,500 from -2.75 to -2.25, -2.75 last; 11% complete
- TYZ5/TYH6 appr 29,200 from 1.5 to 2.0, 1.75 last; 12% complete
- UXYZ5/UXYH6 5,000 from 5.25 to 5.5, 5.25 last; 5% complete
- USZ5/USH6 3,600 from 13.0 to 13.75, 13.25 last; 8% complete
- WNZ5/WNH6 appr 3,300 from 9.75 to 10.25, 10.0 last; 6% complete
- Reminder, Dec'25 futures don't expire until next month: 10s, 30s and Ultras on December 19, 2s and 5s on December 31. Meanwhile, Dec'25 Tsy options will expire this Friday, November 21
ECB: ECB Speak Wrap (Oct 31 – Nov 19) - A Few Tweaks To Hawk/Dove Matrix
The implied probability of another ECB cut this cycle has pulled back since the ECB’s October decision. OIS markets now price just 9bps of easing through September 2026 (vs ~12bps before the October decision). A combination of resilient growth signals and fairly cautious ECBspeak have factored into recent repricing, even with some Governing Council members still cognizant of downside inflation risks in the medium term.
The introduction of the EU’s ETS2 carbon pricing scheme is likely to be delayed by a year to 2028. This is expected to mechanically pull down the ECB’s 2027 inflation projection by ~0.3pp, deepening the expected undershoot of the 2% target, but policymakers have warned against relying too much on these dynamics for calibrating near-term policy.
Taking into account commentary since the October decision, we’ve made a few tweaks to our ECB hawk/dove matrix. See the full report for more
SONIA OPTIONS: Call Calendar Spread
SFIM6 96.70c vs SFIH6 96.55c, sold the June at 4.25 in 5k.
