August 16, 2023 10:38 GMT
Fed Implied Cuts Continue To Build Back Into Recent Ranges
- Fed Funds implied rates have continued yesterday’s decline that emerged shortly after an initially hawkish reaction to stronger than expected US retail sales.
- Near-term rates remain within recent ranges (+2.5bp Sep and cumulative +9bp to Nov terminal), whilst cut pricing pulls back from post July FOMC lows seen before yesterday’s data (with 2024 implied rates climbing strongly in the period since US CPI) for also back into recent ranges.
- Cuts from Nov terminal: 3bp to Dec’23 (from 2.5bp), 52bp to Jun’24 (from 49bp) and 122bp to Dec’24 (from 116bp).
- The FOMC minutes from the Jul 26 meeting are in focus today with no other scheduled Fedspeak.