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Fed Rates At Most Slightly Lower, Mester Wants More Forecast Details

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  • Post-Memorial Day, Fed Funds implied rates are unchanged from Friday’s close for meetings through to September (where there are still low odds of a first cut), with meetings beyond that drifting slightly lower.
  • Cumulative cuts from 5.33% effective: 0.5bp Jun, 3bp Jul, 14bp Sep, 21bp Nov and 35bp Dec.
  • Ahead, Kashkari (non-voter) gives panel remarks at 0955ET (no text) before Governor Cook (voter) and Daly (’24 voter) speaks on AI’s impact on the economy at 1305ET (also no text).
  • Overnight, Kashkari said he needs "Many more months of positive inflation data, I think, to give me confidence that it's appropriate to dial back" when asked what’s needed for cuts.
  • Before that, Mester called for more detail in Fed statements and forecasts, building on a growing number of FOMC participants critiquing the current approach.
  • Gov. Bowman (voter) meanwhile “would have supported either waiting to slow the pace of balance sheet runoff to a later point in time or implementing a more tapered slowing in the pace of runoff.”

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  • Post-Memorial Day, Fed Funds implied rates are unchanged from Friday’s close for meetings through to September (where there are still low odds of a first cut), with meetings beyond that drifting slightly lower.
  • Cumulative cuts from 5.33% effective: 0.5bp Jun, 3bp Jul, 14bp Sep, 21bp Nov and 35bp Dec.
  • Ahead, Kashkari (non-voter) gives panel remarks at 0955ET (no text) before Governor Cook (voter) and Daly (’24 voter) speaks on AI’s impact on the economy at 1305ET (also no text).
  • Overnight, Kashkari said he needs "Many more months of positive inflation data, I think, to give me confidence that it's appropriate to dial back" when asked what’s needed for cuts.
  • Before that, Mester called for more detail in Fed statements and forecasts, building on a growing number of FOMC participants critiquing the current approach.
  • Gov. Bowman (voter) meanwhile “would have supported either waiting to slow the pace of balance sheet runoff to a later point in time or implementing a more tapered slowing in the pace of runoff.”