TREASURY WRAP: T-NOTE FUTURES (H6) SETTLE 15 TICKS LOWER AT 111-24

Analysis details (20:15)

T-Notes sold as Trump suggests he will keep Hassett as NEC Director. At settlement, 2-year +2.8bps at 3.595%, 3-year +3.9bps at 3.661%, 5-year +5.5bps at 3.822%, 7-year +5.7bps at 4.018%, 10-year +5.6bps at 4.227%, 20-year +4.2bps at 4.789%, 30-year +3.8bps at 4.835%.

THE DAY: T-Notes largely meandered overnight before selling off as the US session was underway. However, T-Notes tumbled to lows across the curve after commentary from US President Trump suggested he will not be going ahead with NEC Director Hassett as Fed Chair, stating he would like to keep him where he is. The move was clearly lower across maturities, but it did turn quite choppy across the curve thereafter, with the two-year paring some of the losses and hovering into settlement, while the 30-year also pared a lot of the weakness, before resuming lower into settlement. With Hassett seen as the most dovish, and less friendly for Fed-independence, traders were pricing out rate cuts from the Fed. Elsewhere on the matter, FBN reported that those inside the interview with Rick Rieder for Fed chair, saw it as a positive that he was the only candidate with no prior Federal Reserve experience. Markets are largely favouring former Fed Governor Warsh as the next Fed Chair now, with Kalshi assigning Warsh's probability at 59%. Rieder still lags at 10%, however. We are expecting to get a definitive announcement by the end of January. Elsewhere, Fed's Bowman spoke and struck her usual dovish tone, stating the Fed should not signal a pause in January. 

SUPPLY

Notes

• Reports suggested that the US Treasury is asking dealers whether they should consider quarterly 7-year T-note auctions with reopening's.

Bills

• US to sell USD 85bln of 6-week bills (prev. 75bln), USD 89bln of 13-week bills (prev. 86bln), USD 77bln of 26-week bills (prev. 77bln) and USD 50bln of 52-week bills (prev. 50bln) on Jan 20th, to settle Jan 22nd.

STIRS/OPERATIONS

• Market Implied Fed Rate Cut Pricing: January 0bps (prev. 0bps), March 3.3bps (prev. 3.3bps), April 8.2bps (prev. 8.2bps), December 43.2bps (prev. 47.4bps)


• NY Fed RRP op demand at USD (prev. 2bln) across counterparties (prev. 6)EFFR at 3.64% (prev. 3.64%), volumes at USD 92bln (prev. 93bln) on January 15th


• SOFR at 3.66% (prev. 3.64%), volumes at USD 3.201tln (prev. 3.148tln) on January 15th

16 Jan 2026 - 20:15- ForexResearch Sheet- Source: Newsquawk