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Fed Rates Drift Lower Into Recent Range, Awaiting Data

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  • Fed Funds implied rates are between unchanged and 0.5bp lower overnight as they continue to slowly roll back from Monday’s post CPI/PPI highs.
  • For instance, the Dec’24 of 4.70% is down 3bps from Monday’s high and back to where it ended last week at a level that more firmly implies a coin toss for a third cut of the year with the December meeting (it was ~4.83% pre-CPI).
  • Cumulative cuts: 1bp Jul, 25bp Sep, 40bp Nov, 63bp Dec and 80bp Jan.
  • Data should be in more focus today with US flash PMIs at 0945ET although the week’s main releases are GDP/PCE starting tomorrow.
  • The BoC decision at the same time could see some spillover with a second consecutive cut expected but the broader tone watched.
  • Gov. Bowman and Dallas Fed's Logan give opening remarks but they should steer firmly away from anything monetary policy-related being in the FOMC media blackout.

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  • Fed Funds implied rates are between unchanged and 0.5bp lower overnight as they continue to slowly roll back from Monday’s post CPI/PPI highs.
  • For instance, the Dec’24 of 4.70% is down 3bps from Monday’s high and back to where it ended last week at a level that more firmly implies a coin toss for a third cut of the year with the December meeting (it was ~4.83% pre-CPI).
  • Cumulative cuts: 1bp Jul, 25bp Sep, 40bp Nov, 63bp Dec and 80bp Jan.
  • Data should be in more focus today with US flash PMIs at 0945ET although the week’s main releases are GDP/PCE starting tomorrow.
  • The BoC decision at the same time could see some spillover with a second consecutive cut expected but the broader tone watched.
  • Gov. Bowman and Dallas Fed's Logan give opening remarks but they should steer firmly away from anything monetary policy-related being in the FOMC media blackout.