Several Analysts Capitulating On June Cut View After CPI Data

Several analysts have thrown in the towel on a June FOMC rate cut, or are coming close to that point, after the March CPI report:

• BofA: "We retain our outlook for a June rate cut for now. But we have low confidence; we will see where core PCE lands after PPI...while it may seem natural to shift the first rate cut from June to September, we think that unfavorable base effects on inflation in the second half of this year mean that the Fed could be forced to delay the start of any easing cycle to December of this year or March of next year."
• BMO FICC: "It has now become very difficult to envision 75 bp of rate cuts this year and we're now looking for the biggest move at the June meeting to come in the form of a higher 2024 dot (as well as 2025-2026)."
• CIBC: "We continue to expect the Fed will ease in the second half of this year but the risk of fewer than three cuts has increased after today."
• Goldman Sachs: "We are pushing back our forecast of the first rate cut from June to July...quarterly pace after that, which now implies two cuts in 2024 in July and November."
• ING: "Given this situation a June rate cut is not happening, barring a rapid reversal of fortunes for the economy. July is also doubtful, meaning September is the more probable start point of any easing, which would limit the Fed to a maximum of just three rate cuts this year." [Had seen cuts starting in June].
• Unicredit: "It is unlikely, therefore, that the Fed will start cutting rates in June as we had previously forecast, and so we have today put our Fed forecast under revision."
• Wells Fargo: "We now project two 25 bps rate cuts in Q3 and Q4 of this year as our base case for the fed funds rate" (previously saw 100bp of cuts: 25bp Q2, 50bp Q3, 25bp Q4)