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101bp Of ’24 Fed Cuts Priced As Powell Cautions Against Further Labour Market Loosening

STIR

Some contained dovish repricing in the U.S. short end as Fed Chair Powell stresses that the central bank does not seek or welcome further cooling in the labour market and indicates greater confidence that inflation is on the path to the Fed’s 2% target.

  • This represents the latest evolution in the Fed’s messaging, with the central bank’s focus quickly swinging towards the maximum employment aspect of its dual mandate.
  • Sep meeting pricing shows ~33bp of cuts vs. ~32bp pre-Powell.
  • Nov meeting pricing shows ~67bp of cumulative cuts vs. ~63bp pre-Powell.
  • Dec meeting pricing shows ~101bp of cuts vs. ~96bp pre-Powell.
  • Above pricing drawn from Fed Funds futures.
  • We are still comfortably off the early August dovish extremes.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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