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Consolidating Prior Climb, Fed Personnel Changes Taking Shape

  • Fed Funds implied rates have edged higher after climbing yesterday in a move that was supported further by higher than expected ISM mfg prices paid.
  • 24bp hike priced for tomorrow’s decision (+0.5bp) before a cumulative 32bp of hikes for Jun (+1.5bp). This is now only just reversed with the Nov FOMC at 4.80% (+1.5bp) before 23bp of cuts from current to 4.60% Dec (+0.5bp).

  • The NY Times reported late Mon that President Biden is closing in on promoting Gov. Philip Jefferson to the Vice Chair seat vacated by Brainard, with Adriana Kugler (US executive director of the World Bank) in turn taking his seat.
  • A person familiar also noted that the KC Fed president role could also be filled soon, with Phillip Swagel of the CBO being tipped for what would be a ’25 voting role.

FOMC-dated Fed Funds futures implied ratesSource: Bloomberg

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