Let The Games Begin!

Tomorrow will be action-packed. Wednesday morning, the US Treasury will issue its Quarterly Refunding Statement detailing how it intends to finance $1.0 trillion in marketable securities during Q3. The question is whether Treasury Secretary Scott Bessent will rely more on doing so in the Treasury bill market, as recently suggested by President Donald Trump.

Tomorrow afternoon, the FOMC will issue a press release at 2:00 p.m., most likely announcing that the voting members have decided to leave the federal funds rate unchanged. There is a good chance that Governors Michelle Bowman and Christopher Waller will dissent. They were both appointed by Trump. They have both stated that they want to cut the FFR now before the labor market weakens. If they don't dissent, then the stock and bond markets could rally significantly on expectations that the FOMC participants are leaning toward cutting the FFR in September, thus placating the two potential dissenters.