SOFR Option Weekly Commentary 9/4/26
All eyes will be on next week's inflation data (Thurs PPI/ Fri CPI), but today's stronger than expected employment data (162K nonfarm payrolls added vs 55K expected) prompted a sell off in fixed income futures & equities. The current odds of the Fed on Hold thru the FOMC's Sep 16th meeting are 41.6% (down from 42.5% last week) while the odds of at least one 25 bp hike by the Dec 9th meeting are now 85.7% (down from 89.1 last week). The 10Yr is currently trading @ 4.77%
SOFR Option Vols were lower on the week & over the past two weeks (see attached spreadsheet).