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STIR: Fed Rates Fade Hawkish Shifts In ECB and BoE Pricing

STIR
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  • Fed Funds implied rates are little changed overnight as they consolidate yesterday’s climb.
  • There is little sign of reaction to Trump’s latest tariffs threats (focused on autos, pharmaceuticals and semiconductors, more details due Apr 2) or hawkish shifts in BoE (CPI) and ECB (Schnabel) pricing.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 3.5bp May, 13bp Jun, 17.5bp Jul, 26bp Sep and 36bp Dec.
  • It’s another quieter US macro calendar, with the FOMC minutes eyed at 1400ET. They will be scrutinized primarily for three things: why the Fed shifted its statement language on inflation; was there any discussion of a rate hike scenario; and was there any further discussion over the potential impact of government policy shifts?
  • MNI FOMC Minutes Preview.
  • Vice Chair Jefferson also talks on the household balance sheet at 1700ET with both text and Q&A. He last spoke Feb 4, talking on the need for caution along with many of FOMC members: “As long as the economy and labor market remain strong, I see it as appropriate for the Committee to be cautious in making further adjustments… Over the medium term, I continue to see a gradual reduction in the level of monetary policy restraint placed on the economy as we move toward a more neutral stance as the most likely outcome…that said, I do not think we need to be in a hurry to change our stance.”
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  • Fed Funds implied rates are little changed overnight as they consolidate yesterday’s climb.
  • There is little sign of reaction to Trump’s latest tariffs threats (focused on autos, pharmaceuticals and semiconductors, more details due Apr 2) or hawkish shifts in BoE (CPI) and ECB (Schnabel) pricing.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 3.5bp May, 13bp Jun, 17.5bp Jul, 26bp Sep and 36bp Dec.
  • It’s another quieter US macro calendar, with the FOMC minutes eyed at 1400ET. They will be scrutinized primarily for three things: why the Fed shifted its statement language on inflation; was there any discussion of a rate hike scenario; and was there any further discussion over the potential impact of government policy shifts?
  • MNI FOMC Minutes Preview.
  • Vice Chair Jefferson also talks on the household balance sheet at 1700ET with both text and Q&A. He last spoke Feb 4, talking on the need for caution along with many of FOMC members: “As long as the economy and labor market remain strong, I see it as appropriate for the Committee to be cautious in making further adjustments… Over the medium term, I continue to see a gradual reduction in the level of monetary policy restraint placed on the economy as we move toward a more neutral stance as the most likely outcome…that said, I do not think we need to be in a hurry to change our stance.”
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