Another Round Of Hawkish Post-Data Fed Repricing

Firmer-than-expected PCE readings dominate discussions, with soft headline GDP and lower-than-expected weekly jobless claims data also noted. This results in the latest hawkish post-data move in Fed pricing, as inflation continues along its “bumpy” road.

• ~10bp of cuts are now priced through the July FOMC vs. ~12.5bp pre-meeting, with 36bp of cuts priced through year end (vs. 41.5bp pre-data).
• We are once again approaching the shallowest pricing of cuts seen so far this year.
• Do note that the details of the GDP release don’t look as soft as the headline suggests, we will follow up with more colour shortly.