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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
- FOMC-dated Fed Funds futures have softened slightly today after a strong start, but continue to imply a very aggressive rate path.
- The May meeting has a 42.5bp hike priced, June has a 64% chance of a cumulative 100bp of hikes (82bps priced) and there is a total of 189bp of hikes priced between now and the year-end.
- The softening continued through SF Fed’s Daly (2024 voter) speaking. She noted it’s time to remove the accommodation by “marching up to neutral and looking at whether we need to go over neutral, so tighten a little bit, restrict the economy”, but she didn’t give an indication of preferred pace which was enough to help dent already heady expectations.
- She sees 5Y5Y forward inflation as remaining well-anchored but sees a risk of that de-anchoring if high inflation persists, adding that she is concerned about the broadening in inflation pressures along with the Ukraine war plus the additional shocks from Covid disruptions from China that have just come around again.
- Mester (2022) at 1700ET ahead, worth watching to see if she joins Waller in saying the FOMC should consider 50bp increases at the next couple meetings.
Implied cumulative hikes by FOMC-dated Fed Funds Source: Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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