SOFR Option Weekly Commentary 6/18/26
The Kevin Warsh era at the Fed commenced this week, with rates held unchanged at this week's FOMC meeting. Fixed income markets sold off as current inflation and Fed projections stoked fears of possible hikes this year, even though a US/Iran peace plan was announced and WTI traded under $75.
The current odds of the Fed on Hold through the FOMC's Dec 9th meeting are 15.2% (down from 41.8% last week), while the odds of at least one 25 bp hike are now 84.8% (up from 57.7% last week). The 10Yr is currently trading @ 4.44%.
SOFR Option Vols were mostly higher today, but lower for the week (see attached spreadsheet).