December 19, 2024 20:05 GMT
STIR: Post-FOMC Extremes Pared, But Still Just 1.5 Cuts Seen In 2025
STIR
Fed rate cut expectations recovered slightly Thursday in steady fashion, after being beaten back on Wednesday's hawkish FOMC Dot Plot and communications.
- Fed funds futures currently imply the next full 25bp rate cut only by June (4 meetings away), but that's compared with Jul/Sep implied at Wednesday's close.
- 2025 cumulative rate cuts now stand at just over 38bp, or roughly one-and-a-half 25bp cuts to that point. That's 6bp more than seen at Wednesday's close, but 10bp less than before the FOMC decision release.
- With little reaction to today's slightly stronger-than-expected data (jobless claims, GDP revisions), attention turns to Friday's PCE release, which is the last major data before the Christmas market holiday.
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Dec 18) | Chg Since Then (bp) | Tuesday (Dec 17) |
| Jan 29 2025 | 4.30 | -2.8 | -2.8 | 4.31 | -0.6 | 4.30 |
| Mar 19 2025 | 4.20 | -13.4 | -10.6 | 4.22 | -2.8 | 4.17 |
| May 07 2025 | 4.15 | -18.3 | -4.9 | 4.18 | -3.5 | 4.11 |
| Jun 18 2025 | 4.07 | -25.7 | -7.4 | 4.12 | -4.5 | 4.02 |
| Jul 30 2025 | 4.04 | -28.7 | -3.0 | 4.10 | -5.7 | 3.98 |
| Sep 17 2025 | 4.00 | -33.2 | -4.5 | 4.06 | -6.1 | 3.92 |
| Oct 29 2025 | 3.97 | -35.7 | -2.5 | 4.04 | -6.4 | 3.89 |
| Dec 10 2025 | 3.95 | -38.4 | -2.7 | 4.01 | -6.1 | 3.86 |
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