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STIR: Fed Rates Off CPI Hawkish Extremes But Next Cut Still Only In Oct

STIR
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  • Fed Funds implied rates hold the bulk of yesterday’s push higher on the strong CPI report, although have pulled back slightly more for meetings later in the year as oil prices have declined further on prospects of a Russia/Ukraine peace deal.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 4bp May, 10bp Jun, 13.5bp Jul, 21bp Sep, 25bp Oct and 30bp Dec.
  • There’s no Fedspeak due for the rest of today. Powell yesterday cautioned against getting "excited" about today's CPI report ahead of PPI (today 0830ET), reminding that the latter report carries potentially different implications for the Fed's preferred PCE gauge. That said, "the CPI reading was above almost every forecast.”
  • To that point, see more here. 
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  • Fed Funds implied rates hold the bulk of yesterday’s push higher on the strong CPI report, although have pulled back slightly more for meetings later in the year as oil prices have declined further on prospects of a Russia/Ukraine peace deal.
  • Cumulative cuts from 4.33% effective: 0.5bp Mar, 4bp May, 10bp Jun, 13.5bp Jul, 21bp Sep, 25bp Oct and 30bp Dec.
  • There’s no Fedspeak due for the rest of today. Powell yesterday cautioned against getting "excited" about today's CPI report ahead of PPI (today 0830ET), reminding that the latter report carries potentially different implications for the Fed's preferred PCE gauge. That said, "the CPI reading was above almost every forecast.”
  • To that point, see more here. 
image