IGA Capital Weekly Economic Update
- Joshua Hawley
- May 5
- 2 min read
Week of May 5, 2025
Overview
As global markets continue to reprice interest rate expectations and investors digest central bank signals, IGA Capital remains strategically positioned to help clients navigate this shifting environment. Our structured finance solutions are tailored to capitalize on rate compression, capital market volatility, and dislocations in long-term debt pricing — particularly for projects in emerging and transitional markets.
Monetary Policy and Fed Rate Expectations
Markets have doubled down on expectations of policy easing. Fed Funds Futures now price in up to 80 basis points of rate cuts by year-end, with the implied rate falling to 3.53% by December 2025 from the current 4.32%. The June FOMC meeting now shows a 97.2% probability of a cut, driven by softening inflation and moderate labor conditions. Despite this, the Fed’s dot plot remains more reserved, with a median year-end rate of 3.875%.
Yield Curves and Treasury Forecasts
The 10-year U.S. Treasury yield has climbed to 4.31%, up 31 bps month-over-month. Forecast medians expect the yield to end 2025 near 4.10%, with some analyst estimates as high as 5.00%. The yield curve continues its path toward normalization, with the 2s/10s spread at 0.48%, reflecting a steepening trend.
SOFR and Swap Curve Trends
The 1-month Term SOFR sits at 4.33%, nearly unchanged over the past month. Forward curves, however, anticipate significant easing, with rates projected to fall toward 3.27% over the next 12 months. The 10-year SOFR swap rate increased to 3.77%, tracking long-duration rate moves.
Equity Market Rebound
Major equity indices rallied in late April:
S&P 500: 5,687 (+7.5%)
Nasdaq: 17,978 (+12.0%)
Dow Jones: 41,317 (+3.0%)
Momentum was led by tech and infrastructure sectors, bolstered by improving earnings visibility. Despite volatility, investor risk appetite appears intact, supported by declining PCE inflation and robust liquidity.
IGA Capital Insight
This environment creates new windows for pre-IPO capital structuring, convertible equity issuance, and growth capital placements — areas where IGA Capital actively advises clients in fintech, real assets, and infrastructure verticals.
Real Estate and Fixed Income
DJ U.S. Real Estate Index rose 2.7%
Residential REITs were flat; mortgage REITs remained under pressure
Long-term Treasuries fell -5.1%, while high-yield debt gained 1.3%
Commodity Movements and Inflation Outlook
Gold: $3,305/oz (+6.1% MoM)
Oil: $57.37/barrel (-13.2%)
U.S. CPI eased to 2.4% YoY; PCE fell to 2.65%
What This Means for IGA Capital Clients
In a world where monetary policy pivots and cross-asset volatility accelerate financing risks, IGA Capital supports its clients with:
Cross-border project finance structuring
Hedging and cap strategies on SOFR-linked debt
Investor syndication and institutional pricing access
Capital stack optimization in volatile macro environments #Finance #SOFR #Equities #BondMarket #FED #EconomicData #Commodities #MonetaryPolicy #MarketData
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