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Just Shy Of Pricing Four Consecutive Fed Cuts

STIR
  • The ISM manufacturing miss including its eye-catching almost 6pt decline in the employment index has sparked a further decline in Fed Funds implied rates after dovish jobless claims and unit labor cost data.
  • The latest reaction is muted for September implications, struggling to additional impetus ahead of payrolls, but subsequent meetings have pushed lower with the Dec’24 implied rate now 4.5bp lower since the 0830ET data and the Jan’25 6bps lower.
  • Cumulative cuts from 5.33% effective: 29.5bp Sept, 51bp Nov, 77bp Dec and 98bp Jan.

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