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Dovish Move In Fed Pricing On PPI & Jobless Claims, CPI-Driven Extremes Intact

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A fresh dovish move is seen in FOMC-dated OIS in the wake of the much softer-than-expected PPI data and higher-than-expected weekly jobless claims readings.

  • That takes the major measures towards yesterday’s CPI-driven dovish extremes, with the potential for another round of negative revisions to PCE forecasts, dependent on the details of the PPI data.
  • ~46bp of ’24 cuts are priced into the strip vs. pre data levels of ~42bp and post-data extremes of ~47bp. A reminder that we saw ~49bp of cuts priced through that juncture in the wake of yesterday’s CPI reading.
  • The first cut remains more than fully priced through the November FOMC, with ~28bp of cuts showing there vs. ~26bp heading into the PPI readings.
  • ~18bp of cuts are priced through the Sep FOMC vs. ~16bp pre-data.
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A fresh dovish move is seen in FOMC-dated OIS in the wake of the much softer-than-expected PPI data and higher-than-expected weekly jobless claims readings.

  • That takes the major measures towards yesterday’s CPI-driven dovish extremes, with the potential for another round of negative revisions to PCE forecasts, dependent on the details of the PPI data.
  • ~46bp of ’24 cuts are priced into the strip vs. pre data levels of ~42bp and post-data extremes of ~47bp. A reminder that we saw ~49bp of cuts priced through that juncture in the wake of yesterday’s CPI reading.
  • The first cut remains more than fully priced through the November FOMC, with ~28bp of cuts showing there vs. ~26bp heading into the PPI readings.
  • ~18bp of cuts are priced through the Sep FOMC vs. ~16bp pre-data.