SOFR Option Weekly Commentary 5/29/26
PCE numbers released on Thursday were the highest since 2023; however, oil fell this week as the ceasefire with Iran continues to hold and optimism regarding a peace deal grows. Durable goods orders came in much higher than expected as the US economy and consumer spending both continue to be strong.
The current odds of the Fed on Hold through the FOMC's Dec 9th meeting are 55%, while the odds of at least one 25 bp hike are now 45% (down from 70.2% last week). The 10Yr is currently trading @ 4.44%.
SOFR Option Vols were lower this week (see attached spreadsheet).