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Dovish Fed Repricing On JOLTs, ~110bp Of '24 Cuts Priced

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Softer-than-expected JOLTS data (coupled with negative revisions) drives dovish Fed repricing, likely exacerbated by the fact that the Fed’s focus is now firmly tilted towards preventing further loosening in the labour market.

  • ~37bp of cuts now priced into Fed Funds futures for this month’s FOMC i.e. near 50/50 odds of a 50bp cut. That compares to pre-data levels of ~35bp and post-data extremes of ~38bp.
  • Further out, ~109bp of cuts are priced through year end vs. ~105bp heading into the data and post-data extremes of ~112bp.
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Softer-than-expected JOLTS data (coupled with negative revisions) drives dovish Fed repricing, likely exacerbated by the fact that the Fed’s focus is now firmly tilted towards preventing further loosening in the labour market.

  • ~37bp of cuts now priced into Fed Funds futures for this month’s FOMC i.e. near 50/50 odds of a 50bp cut. That compares to pre-data levels of ~35bp and post-data extremes of ~38bp.
  • Further out, ~109bp of cuts are priced through year end vs. ~105bp heading into the data and post-data extremes of ~112bp.