February 14, 2025 20:30 GMT
STIR: Implied Fed Cuts Complete Post-CPI Comeback On Retail Sales
STIR
The futures-implied Fed funds rate path took a dovish turn Friday with a weak January retail sales report that cast doubt on the strength of the US consumer going into 2025 (Atlanta Fed's GDPNow fell sharply to 2.3% from 2.8% prior).
- The first 25bp rate cut is fully priced by September, vs October at the end of Thursday's session. Friday saw 8bp added to the 2025 rate cut path.
- For the week, there's been an uptick in cumulative 2025 cuts (41bp vs 36bp at the end of last week) - and that's despite the well-above-expected CPI readings Wednesday (which saw implied cuts reach a low of 26bp).
- See table below.
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Feb 13) | Chg Since Then (bp) | End of Last Week (Feb 07) |
| Mar 19 2025 | 4.32 | -0.6 | -0.6 | 4.32 | 0.0 | 4.30 |
| May 07 2025 | 4.28 | -5.3 | -4.7 | 4.29 | -1.3 | 4.26 |
| Jun 18 2025 | 4.18 | -15.2 | -9.9 | 4.22 | -3.9 | 4.18 |
| Jul 30 2025 | 4.13 | -20.2 | -5.0 | 4.18 | -5.0 | 4.13 |
| Sep 17 2025 | 4.04 | -29.5 | -9.3 | 4.10 | -6.2 | 4.07 |
| Oct 29 2025 | 3.99 | -34.3 | -4.8 | 4.06 | -7.1 | 4.02 |
| Dec 10 2025 | 3.92 | -40.7 | -6.4 | 4.00 | -7.6 | 3.97 |
145 words