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Fed Implied Rates Extend Decline On ISM Services

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  • The ISM Services miss sees Fed Funds implied rates extend the day’s declines following a collection of dovish releases today, with the latest decline possibly limited by ISM prices paid only seeing a limited miss compared to the much larger declines in new orders and employment.
  • The Dec’24 implied rate is down a further ~2.5bp since the ISM Services report for 5bps lower vs pre-ADP levels.
  • At an implied effective 4.85% (48bp of cuts), it leaves end-2024 rates at a similar level to after the US retail sales miss on Jun 18 but above the initial levels seen after the US CPI miss on Jun 12.
  • See the below table for the nearer-term meeting run.

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  • The ISM Services miss sees Fed Funds implied rates extend the day’s declines following a collection of dovish releases today, with the latest decline possibly limited by ISM prices paid only seeing a limited miss compared to the much larger declines in new orders and employment.
  • The Dec’24 implied rate is down a further ~2.5bp since the ISM Services report for 5bps lower vs pre-ADP levels.
  • At an implied effective 4.85% (48bp of cuts), it leaves end-2024 rates at a similar level to after the US retail sales miss on Jun 18 but above the initial levels seen after the US CPI miss on Jun 12.
  • See the below table for the nearer-term meeting run.