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Expiries for Sep29 NY cut 1000ET (Source DTCC)

FED
FED: /ANALYSIS: Trade War Boosts Fed Analysts' Dovishness: MNI`s review of 29
sell-side analysts` notes shows a split of opinions on further FOMC easing.
- 11 of 29 analysts see one further 25bps cut in 2019, with 14 expecting 50bps
of further easing this year. For 2020, the range of expected Fed funds midpoints
range from 0.375% to 2.125% (i.e. from zero to 175bps in cuts from here). The
most aggressive easing forecasts are from TD, Danske and Rabobank (5-7 cuts).
- Consensus is getting more dovish, with 11 of the analysts we track reducing
forecast rate paths and/or moving forecast cuts forward since U.S.-China trade
war fears have grown, namely since Pres Trump's Aug. 1 announcement of further
tariffs. See table on next page for more details of recent views changes.
- The average Fed funds forecast for end-2019 has fallen to 1.86% from from
2.16% in June; for end 2020 it has dropped to 1.67% from 2.00% in June.
- But sell-side consensus is less dovish than the market itself: our new Dot
Plot below shows where analysts` forecasts for end-2019/2020 Fed funds rates
are, compared with OIS (the red dots, per MNI PINCH).
- For full analysis, see email or contact us.