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STIR: 25bp Cut Slightly Preferred To 50bp Ahead Of Claims & ISM Services

STIR
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  • Fed Funds implied rates are unchanged for November but beyond that sit 1-2bps higher overnight. Rates for the Nov and Dec meetings sit just below intraday highs seen after Powell’s NABE speech and Q&A on Monday.
  • Cumulative cuts from 4.83% effective: 34.5bp Nov, 70bp Dec, 100bp Jan and 160bp June.
  • Fedspeak should be secondary to data today, headlined by weekly jobless claims at 0830ET before ISM services at 1000ET.
  • 1000ET – Schmid (’25 voter) gives welcome remarks at a banking conference (no text). He last spoke Aug 22 when he needed to see more data before he could support a rate cut (which he clearly did with only Bowman dissenting to the 50bp cut) and noted potential for demand to pickup if the Fed isn’t careful. However, today's structure and topic should limit discussion.
  • 1040ET – Kashkari (non-voter) moderates a discussion with Bostic (’24) on inclusive economy (no text)
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  • Fed Funds implied rates are unchanged for November but beyond that sit 1-2bps higher overnight. Rates for the Nov and Dec meetings sit just below intraday highs seen after Powell’s NABE speech and Q&A on Monday.
  • Cumulative cuts from 4.83% effective: 34.5bp Nov, 70bp Dec, 100bp Jan and 160bp June.
  • Fedspeak should be secondary to data today, headlined by weekly jobless claims at 0830ET before ISM services at 1000ET.
  • 1000ET – Schmid (’25 voter) gives welcome remarks at a banking conference (no text). He last spoke Aug 22 when he needed to see more data before he could support a rate cut (which he clearly did with only Bowman dissenting to the 50bp cut) and noted potential for demand to pickup if the Fed isn’t careful. However, today's structure and topic should limit discussion.
  • 1040ET – Kashkari (non-voter) moderates a discussion with Bostic (’24) on inclusive economy (no text)