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Fed Rate Path Dips, Fedspeak Skewed Late On

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  • Fed Funds implied rates have pulled back from highs sees over the past two sessions, driven by demand at outright levels rather than any new drivers. It sees levels back close to where they were before lifting with Powell yesterday.
  • Cumulative cuts from 5.33% effective: 1bp May, 4bp Jun, 12.5bp Jul, 23bp Sep, 30bp Nov and 42bp Dec.
  • Today’s Fed commentary sees the Beige Book at 1400ET before late appearances from Mester and Gov. Bowman, both potentially offering post-CPI reactions in moderated discussions.
  • 1730ET – Mester (’24 retiring in June) gives an “Update From the Fed” in Q&A. She said Apr 4 (before both payrolls and CPI) that mon pol is in a good place and expects to be in a position to cut rates later this year but needs more evidence that inflation is coming down, wanting a couple more months of data to assess inflation.
  • 1915ET – Bowman (voter) in fireside chat at IIF Global Outlook Forum. She said Apr 5 (post payrolls, pre CPI) that “still not yet” time to lower interest rates as inflation progress has stalled and won’t be comfortable cutting until disinflation returns.
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  • Fed Funds implied rates have pulled back from highs sees over the past two sessions, driven by demand at outright levels rather than any new drivers. It sees levels back close to where they were before lifting with Powell yesterday.
  • Cumulative cuts from 5.33% effective: 1bp May, 4bp Jun, 12.5bp Jul, 23bp Sep, 30bp Nov and 42bp Dec.
  • Today’s Fed commentary sees the Beige Book at 1400ET before late appearances from Mester and Gov. Bowman, both potentially offering post-CPI reactions in moderated discussions.
  • 1730ET – Mester (’24 retiring in June) gives an “Update From the Fed” in Q&A. She said Apr 4 (before both payrolls and CPI) that mon pol is in a good place and expects to be in a position to cut rates later this year but needs more evidence that inflation is coming down, wanting a couple more months of data to assess inflation.
  • 1915ET – Bowman (voter) in fireside chat at IIF Global Outlook Forum. She said Apr 5 (post payrolls, pre CPI) that “still not yet” time to lower interest rates as inflation progress has stalled and won’t be comfortable cutting until disinflation returns.