April 10, 2024 12:45 GMT
Less Than 50bp Of Fed Cuts Priced For '24
STIR
Sizeable moves in FOMC-dated OIS pricing on the firmer-than-expected headline CPI prints, which were complimented by firm underlying readings at first glance.
- June pricing eases to ~6bp of cuts vs. ~15bp pre-release.
- ~13bp of cuts are now priced through the end of the July FOMC (a 25bp cut was fully priced pre-CPI), while ~26bp of easing is priced through September (vs. ~41.5bp pre-data).
- ~48.5bp of cuts are now priced for ’24 on the whole, as the recent hawkish repricing extends.
- Participants have been emboldened by the CPI data, which has allowed pricing to push further through the Fed’s median SEP dot.
- Recent inflation and labour market dynamics add to the “no landing” narrative, while election considerations are also noted in discussions.
121 words