STIR
- Fed Funds implied rates continue to see some of the week’s dovish labor data weigh, primarily JOLTS and ADP having faded stronger than expected jobless claims.
- Cumulative cuts from 5.33% effective: 35.3bp Sep, 73bp Nov, 112bp Dec, 144bp Jan and 212bp June.
- Payrolls is clearly the major risk event today – see the MNI Preview here: https://media.marketnews.com/USNFP_Sep2024_Preview_156b327b83.pdf
- It is followed by permanent FOMC voters Williams (0845ET) and Waller (1100ET) offering the last major steers before the blackout begins ahead of the Sep 17-18 FOMC meeting. Both only last notably spoke on Jul 17 (i.e. pre Jul 30-31 FOMC).
- NY Fed’s Williams said the prior three months had shown closer to the disinflation trend that the Fed wants to see whilst the labor market remains strong, with the Fed then set to learn “a lot” between July and September.
- Fed Gov. Waller said we were getting closer to the time when a rate cut is warranted, judging that the labor market was in a sweet spot but it needed to be kept there. He generally deemed the data consistent with achieving a soft landing.
- Chicago Fed’s Goolsbee (’25 voter) also appears on CNBC (1130ET) having already said yesterday to MarketWatch that the trending economic data and the appearance of more warning signs about a cooling labor market justifies multiple rate cuts, starting soon.
- Recall that the minutes to the Fed’s discount rate meetings in July the directors of the NY Fed and Chicago Feds voted to cut the primary credit discount rate by 25bps. Those are separate to Presidents Williams and Goolsbee but the latter two could well have been some of the members who - in the language of the separate FOMC minutes - "could have supported" a rate cut at the July meeting.
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