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Fed Rate Path Close To Post Retail Sales Recent Highs

STIR
  • Fed Funds implied rates have continued to push higher in moves started by beats for jobless claims & Philly Fed mfg before Williams (voter, usually dovish-leaning) saw “no urgency” for cuts, with them coming “eventually at some point”. They have however most recently given back a small part of the rise after the strong 5Y TIPS auction.
  • Cumulative cuts from 5.33% effective: 1bp May, 4bp Jun, 11.5bp Jul, 22bp Sep, 39bp Dec.
  • The Dec’24 implied rate of 4.94-95% is back close to latest highs of 4.96% seen on Monday after a strong beat for retail sales. It compares with the median FOMC dot of 4.5-4.75% from the March SEP.
  • Still to come, potential local media interviews with Collins (non-voter) and Bostic (’24, already heard from today). It leaves Goolsbee (’25 voter) as the sole speaker scheduled for tomorrow, who we’ve also heard from since the strong US CPI last week.
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  • Fed Funds implied rates have continued to push higher in moves started by beats for jobless claims & Philly Fed mfg before Williams (voter, usually dovish-leaning) saw “no urgency” for cuts, with them coming “eventually at some point”. They have however most recently given back a small part of the rise after the strong 5Y TIPS auction.
  • Cumulative cuts from 5.33% effective: 1bp May, 4bp Jun, 11.5bp Jul, 22bp Sep, 39bp Dec.
  • The Dec’24 implied rate of 4.94-95% is back close to latest highs of 4.96% seen on Monday after a strong beat for retail sales. It compares with the median FOMC dot of 4.5-4.75% from the March SEP.
  • Still to come, potential local media interviews with Collins (non-voter) and Bostic (’24, already heard from today). It leaves Goolsbee (’25 voter) as the sole speaker scheduled for tomorrow, who we’ve also heard from since the strong US CPI last week.