SOFR Option Weekly Commentary 10/2/26
Core PCE MoM 0.2% (vs 0.3% expected) & YoY 3.0% (vs 3.3% expected) came in lower than expectations & showed core inflation lowering prior to the FED's hike. Today's lower than expected Payrolls number along with lower revisions for the past two months also dampened inflation fears. The current odds of the FED hiking 25 bp at its Oct 28th meeting are 23.8% while the odds of at least 1 rate hike by year end are 88.3%. The 10Yr is trading @ 5.28%.