dots and dissents
March 18, 2026
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–Boring day yesterday with little outright movement. Peak SOFR contract SFRZ7 rose 1.5 to 9672.5. Ten year yield fell1.8 to 4.20%. Implied vol continued to slip in front of today’s FOMC. As an example, 0QM6 (SFRM7 underlying midcurve straddle) was 54.5 on Friday, then 46.0 on Monday (9662.5^ vs 9664.0) to 43.0 yesterday (962.5^ vs 9665.5).
–Today there will be a lot of fluffy analysis about dissentions and dots. The last Fed meeting was Jan 26, which didn’t include SEP. However, I thought it might be instructive to look at actual market prices from Jan 28, the Friday after the last FOMC, to yesterday. To me, it doesn’t appear as if the market is clamoring for ease or hike one way or the other, even with obvious price ramifications of oil.
Price or yld 1/28/26 3/17/27
2y 3.573 3.667
5y 3.830 3.782
10y 4.244 4.200
30y 4.856 4.850
SFRM7 9671.5 9666.0
SPX 6978 6716
CL1 62.39 96.21
GOLD 5417 5005
DXY 96.45 99.57
The standout of course, is oil, +54%. SPX is down 3.8%. But rates have barely budged. It’s true that there’s been some volatility since the Jan meeting, and it’s clear the market has tamped down forward easing expectations. Dollar strength has likely added to the idea of economic restraint. But it doesn’t appear that there’s any compelling reason for the Fed to act prior to Warsh coming in.
