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STIR: Dovish Reaction To Retail Sales Miss Extends, 40bp Fed Cut For The Year

STIR
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  • The dovish reaction in US rates has continued following the surprisingly weak retail sales report, with revisions not coming close to offsetting the January miss.
  • In fact, the miss for the control group (-0.8% M/M vs cons +0.3%) actually followed net downward revisions worth -0.17pps.
  • Fed Funds implied rates are 3.5bp lower for the June meeting and 7bp lower for the Dec contract post-release.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 5.5bp May, 14.5bp Jun, 19.5bp Jul, 28.5bp Sep and 40bp Dec.
  • The 40bp of cuts for the year has climbed from 30bp before yesterday’s PPI and a post-CPI recent low of 26bp. 
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  • The dovish reaction in US rates has continued following the surprisingly weak retail sales report, with revisions not coming close to offsetting the January miss.
  • In fact, the miss for the control group (-0.8% M/M vs cons +0.3%) actually followed net downward revisions worth -0.17pps.
  • Fed Funds implied rates are 3.5bp lower for the June meeting and 7bp lower for the Dec contract post-release.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 5.5bp May, 14.5bp Jun, 19.5bp Jul, 28.5bp Sep and 40bp Dec.
  • The 40bp of cuts for the year has climbed from 30bp before yesterday’s PPI and a post-CPI recent low of 26bp. 
image