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STIR: Next Fed Cut Tilts Back To June, PCE and Fedspeak Resumption Ahead

STIR
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  • Fed Funds implied rates have continued yesterday’s paring of Wednesday’s hawkish Fed announcement, with the Jun’25 rate for example having now unwound about half of the shunt higher.
  • Cumulative cuts from 4.33% effective: 3bp Jan, 14bp Mar, 19bp May, 27bp Jun and 42bp Dec.
  • Today’s macro focus is on the PCE/incomes report for November.
  • We also see a restart of Fedspeak, with media appearances from SF Fed’s Daly (was a ’24 voter with next voting role set for ’27) early on at 0730ET before NY Fed’s Williams (permanent voter) at 0830ET.
  • Both had a voting role at this week’s meeting and so are very unlikely to have been one of the four dots who marked down a preference for no change in the dot plot (along of course with their prior views). We nevertheless watch for signs of broader hawkish rhetoric after the notable shifts in the dot plot and forecasts considering both members are on the dovish end of the FOMC.  
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  • Fed Funds implied rates have continued yesterday’s paring of Wednesday’s hawkish Fed announcement, with the Jun’25 rate for example having now unwound about half of the shunt higher.
  • Cumulative cuts from 4.33% effective: 3bp Jan, 14bp Mar, 19bp May, 27bp Jun and 42bp Dec.
  • Today’s macro focus is on the PCE/incomes report for November.
  • We also see a restart of Fedspeak, with media appearances from SF Fed’s Daly (was a ’24 voter with next voting role set for ’27) early on at 0730ET before NY Fed’s Williams (permanent voter) at 0830ET.
  • Both had a voting role at this week’s meeting and so are very unlikely to have been one of the four dots who marked down a preference for no change in the dot plot (along of course with their prior views). We nevertheless watch for signs of broader hawkish rhetoric after the notable shifts in the dot plot and forecasts considering both members are on the dovish end of the FOMC.