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Fed Implied Rates Following Europe Lower

STIR
  • Fed Funds implied rates saw little net impact from the BoJ decision with ultimately a following through of well-touted policy measures, but have more recently dipped in spillover from a rally in front-end UK and Euro rates.
  • Cumulative cuts from 5.33% effective: 0.5bp Mar, 2.5bp May, 16.5bp Jun, 26.5bp Jul and 73bp Dec.
  • Focusing on June, Fed swaps have pulled further back from briefly pricing less than 50% odds of a June cut, with CME’s FedWatch currently showing a 55% chance of a 25bp cut and 4% of a 50bp cut.

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