February 18, 2025 20:21 GMT
STIR: Less-Dovish Waller And Daly Set Tone For Less Implied 2025 Easing
STIR
The implied Fed rate path shows a little less easing Tuesday, with end-2025 futures pricing a 3.96% funds rate, up 3bp vs Monday.
- That's still below the 4.05% closing peak after last Wednesday's CPI data, but less-dovish-leaning comments by Gov Waller overnight (eyeing rate cuts "at some point this year" vs his musing last month of cuts earlier than markets expected) set the tone. SF's Daly, usually dovish leaning, noted Tuesday that "policy needs to remain restrictive until, from my vantage point, until I see that we are really continuing to make progress on inflation.”
- The first full cut is still only priced for September (around 27bp), with another :"half-cut" implied by year-end.
- Wednesday's schedule includes the January FOMC minutes (MNI's preview will be out later today).
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Feb 17) | Chg Since Then (bp) | End of Last Week (Feb 14) | Chg (bp) |
| Mar 19 2025 | 4.32 | -0.6 | -0.6 | 4.32 | 0.0 | 4.32 | 0.0 |
| May 07 2025 | 4.29 | -4.0 | -3.4 | 4.27 | 1.6 | 4.28 | 1.3 |
| Jun 18 2025 | 4.20 | -12.9 | -8.9 | 4.18 | 2.6 | 4.18 | 1.8 |
| Jul 30 2025 | 4.15 | -17.7 | -4.8 | 4.12 | 3.0 | 4.13 | 2.0 |
| Sep 17 2025 | 4.06 | -26.7 | -9.0 | 4.03 | 3.5 | 4.04 | 2.0 |
| Oct 29 2025 | 4.02 | -30.7 | -4.0 | 3.98 | 4.0 | 3.99 | 3.0 |
| Dec 10 2025 | 3.96 | -36.6 | -5.9 | 3.93 | 3.4 | 3.93 | 3.1 |
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