- Fed Funds implied rates for 2024 meetings have pulled back slightly on the day but it comes from particularly elevated levels as a hawkish reaction continued to build after Chair Powell’s conference finished.
- Shown in the table comparing levels before both the announcement and press conference, the main takeaway has been a further large trimming of cut expectations on net.
- Cumulative hikes from 5.33% effective: +7.5bp for Nov, +13bp for Dec and +14bp to 5.47% for Jan.
- Cuts from terminal: 21bp to Jun’24 (27bp pre-decision) and 74bp to Dec’24 (86bp pre-decision) with the latter to an effective 4.73% vs 5.1% end-2024 dot. The first cut is seen landing in September.
- Earlier today, the SNB surprisingly held rates at 1.75% (cons 2.00%), whilst the Norges Bank and Riksbank both hiked 25bps as expected to 4.25% and 4%, whilst indicating peaks of 4.5% and 4.1% respectively. The BoE follows shortly.
STIR: Fed Implied Rates Only Modestly Trim An Extended Post-FOMC Push Higher
Last updated at:Sep-21 10:16By: Chris Harrison
- Fed Funds implied rates for 2024 meetings have pulled back slightly on the day but it comes from particularly elevated levels as a hawkish reaction continued to build after Chair Powell’s conference finished.
- Shown in the table comparing levels before both the announcement and press conference, the main takeaway has been a further large trimming of cut expectations on net.
- Cumulative hikes from 5.33% effective: +7.5bp for Nov, +13bp for Dec and +14bp to 5.47% for Jan.
- Cuts from terminal: 21bp to Jun’24 (27bp pre-decision) and 74bp to Dec’24 (86bp pre-decision) with the latter to an effective 4.73% vs 5.1% end-2024 dot. The first cut is seen landing in September.
- Earlier today, the SNB surprisingly held rates at 1.75% (cons 2.00%), whilst the Norges Bank and Riksbank both hiked 25bps as expected to 4.25% and 4%, whilst indicating peaks of 4.5% and 4.1% respectively. The BoE follows shortly.
