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$-Bloc Continues To Price Out Easing

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STIR markets within the $-bloc continue to price out dovish policy projections for this year. Year-end official rate projections have firmed by 10-26bps compared to levels from a week and a half ago, with the most notable increases observed in the US and New Zealand, while Australia and Canada trail behind.

  • Overnight, the markets reacted negatively to comments from NY Fed Williams on the potential for a data-driven rate hike in the future.
  • Speaking at an event in Florida, Atlanta Fed President Bostic stated that the economy is slowing down gradually, with wage growth outpacing the inflation rate. He mentioned that the current policy is restrictive but is on the path toward the 2% inflation target, emphasising a patient approach and reiterating his view of one rate cut this year.
  • Later today, Chicago Fed Goolsbee will participate in a moderated Q&A at a SABEW conference ahead of the Fed blackout late Friday.
  • December 2024 expectations and the cumulative easing across the $-bloc stand at: 4.93%, -40bps (FOMC); 4.40%, -60bps (BoC); 4.14%, -18bps (RBA); and 5.19%, -32bps (RBNZ).

Figure 1: $-Bloc STIR (%)


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STIR markets within the $-bloc continue to price out dovish policy projections for this year. Year-end official rate projections have firmed by 10-26bps compared to levels from a week and a half ago, with the most notable increases observed in the US and New Zealand, while Australia and Canada trail behind.

  • Overnight, the markets reacted negatively to comments from NY Fed Williams on the potential for a data-driven rate hike in the future.
  • Speaking at an event in Florida, Atlanta Fed President Bostic stated that the economy is slowing down gradually, with wage growth outpacing the inflation rate. He mentioned that the current policy is restrictive but is on the path toward the 2% inflation target, emphasising a patient approach and reiterating his view of one rate cut this year.
  • Later today, Chicago Fed Goolsbee will participate in a moderated Q&A at a SABEW conference ahead of the Fed blackout late Friday.
  • December 2024 expectations and the cumulative easing across the $-bloc stand at: 4.93%, -40bps (FOMC); 4.40%, -60bps (BoC); 4.14%, -18bps (RBA); and 5.19%, -32bps (RBNZ).

Figure 1: $-Bloc STIR (%)


Keep reading...Show less