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Traders align their rate bets with the Federal Reserve, a Pimco-owned firm defaults on mortgages and Russia’s Vladimir Putin garners more su [View in browser]( [Bloomberg]( Traders align their rate bets with the Federal Reserve, a Pimco-owned firm defaults on mortgages and Russia’s Vladimir Putin garners more support for the war. — [Kristine Aquino]( To catch up on the trading day in the UK and Europe, [check out Markets Today.]( Fed aftermath Risk assets were[more upbeat]( in the aftermath of the minutes of the Fed’s most recent gathering, as traders’ expectations for the peak in interest rates aligned with policy makers’ comments. The minutes showed [“almost all”](officials agreed it was appropriate to raise interest rates by 25 basis points at the meeting, while “a few” favored or could have supported a bigger 50 basis-point hike. Separately, New York Fed President John Williams, a policy voter this year, said it’s critical for the central bank to [remain committed]( to its 2% inflation goal. “Our job is to make sure that we restore price stability which is truly the foundation of a strong economy,” Williams said at a conference. Mortgage default Office landlord Columbia Property Trust, which is controlled by Pimco, has [defaulted on about $1.7 billion of mortgage notes]( on seven buildings in San Francisco, New York, Boston and Jersey City, New Jersey. This follows a [default by Brookfield](on loans tied to two Los Angeles office towers earlier this month. US offices, particularly older buildings with fewer amenities, have struggled in recent years with the rise of remote work during the pandemic and recent layoffs. Values of those properties have fallen 20% since the onset of the pandemic in March 2020, according to Green Street. Putin’s war [Russian support for the Ukraine invasion]( is solidifying as Putin leads the country into a second year of war. To shore up support, his government has doled out cash payments to citizens in the country’s impoverished regions and shut down the few remaining media outlets that challenged the official state version of events. While casualties have mounted into the tens of thousands, the majority of Russians say they are ready to keep fighting, according to independent polls. Only about a fifth of Russians want to bring a quick end to the war if that means admitting defeat, according to a Kremlin consultant. Optimistic futures S&P 500 futures climbed 0.3% as of 5:43 a.m. in New York, while Nasdaq 100 contracts advanced 0.7%. Treasuries edged lower, following yesterday’s gains. The Bloomberg Dollar Spot Index recovered from earlier lows, pressuring most Group-of-10 currencies. Gold was little changed, while oil advanced. Bitcoin rose nearly 2% following two days of losses. Coming up… At 8:30 a.m., we’ll get initial jobless claims data. Atlanta Fed President Raphael Bostic will speak at 10:50 a.m., followed by his San Francisco counterpart Mary Daly at 2 p.m. Earnings include Alibaba, Bath & Body Works, Keurig Dr Pepper, Domino's, Papa John's and Beyond Meat. What we’ve been reading Here’s what caught our eye over the past 24 hours: - [US Air Force pilot took a selfie](with China’s balloon at 60,000 feet - Apple makes progress on a[blood glucose-tracking watchÂ]( - [The next WFH threat](? Tax breaks that hinge on in-office work - [Sliding Rolex values]( pushes a pre-owned watch seller to cut prices - A Japanese domestic flight was[forced to u-turn](minutes before landing - The [soaring cost of pizza ingredients]( weighs on Italians’ wallets - How [Cocaine Bear director]( Elizabeth Banks tackled the project And finally, here’s what Tracy is interested in this morning There are a bunch of different ways that benchmark interest rates affect the average person, but perhaps the most visible (other than through mortgage rates) comes via the rate of return on your savings account. At the moment, the average interest rate on US bank accounts is [just 0.23% according to Bankrate.com](, which is a lot lower than benchmark rates that now sit at 4.5-4.75%. So why the discrepancy? Aren't banks supposed to raise their savings rate as the Federal Reserve hikes? That's the topic of the latest episode of Odd Lots, which features Barclays strategist Joseph Abate. As he argues, deposit rates usually do go up during tightening cycles -- it's just a question of how fast. That's because banks typically begin tightening cycles with lots and lots of deposits, which means they're not really in any rush to try to get more. As customers start moving their money into alternative higher-yielding products (like money market funds), banks begin to raise their rates to replace lost deposits. The tendency for bank deposit rates in a "rising rate environment go up like a feather, and in a interest rate cutting environment where the Fed is easing policy, they sink like a stone, that's been a phenomena for decades," says Abate. But there is an [argument to be made]( that the relationship between benchmark rates and bank deposit ones has been weakening in recent years. One explanation for this has to do with quantitative easing, which has resulted in banks holding more deposits than ever before -- meaning they're not really in a hurry to compete for more. But Abate also points to something else: "Banks increasingly, especially the larger domestic institutions, they're not competing specifically on explicit interest. Rather than compete on interest rate, they compete on price services." So banks haven't been raising interest rates because they haven't really needed to. They still have plenty of deposits sloshing around and big clients are more likely to respond to extra services and high-touch offerings than a measly extra basis point or two. That's not going to be any comfort to people earning 0.23% on their savings, but it goes some way toward explaining the frustratingly slow way in which Fed hikes are passed on. You can[find the full episode here](. — [Tracy Alloway]( Follow Us You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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