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STIR: Another Step Closer To A 50bp Cut On Wednesday

STIR
BulletMarketsFixed Income Bullets
  • Fed Funds implied rates sit with a 50bp cut from the FOMC as more likely than not on Wednesday, with 40bp priced vs 36bp late Fri  (OIS meanwhile showing 37.5bp).
  • It continues to be influenced by Thursday’s WSJ and FT articles on the decision being a “close call”, which prompted a significant shift away from 28bp priced after CPI and PPI data.
  • Former NY Fed President Dudley says he thinks the Fed should and will cut 50bp.
  • At current pricing, the FOMC is set to ‘surprise’ markets by the most in many years no matter whether it cuts by 25bp or 50bps.
  • As such, markets will be on tenterhooks for any further blackout steers in the press today in what’s otherwise a quiet session before tomorrow’s retail sales report.
  • Cumulative cuts from 5.33% effective: 40bp Sep, 78bp Nov, 119bp Dec, 157bp Jan and 232bp June.
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  • Fed Funds implied rates sit with a 50bp cut from the FOMC as more likely than not on Wednesday, with 40bp priced vs 36bp late Fri  (OIS meanwhile showing 37.5bp).
  • It continues to be influenced by Thursday’s WSJ and FT articles on the decision being a “close call”, which prompted a significant shift away from 28bp priced after CPI and PPI data.
  • Former NY Fed President Dudley says he thinks the Fed should and will cut 50bp.
  • At current pricing, the FOMC is set to ‘surprise’ markets by the most in many years no matter whether it cuts by 25bp or 50bps.
  • As such, markets will be on tenterhooks for any further blackout steers in the press today in what’s otherwise a quiet session before tomorrow’s retail sales report.
  • Cumulative cuts from 5.33% effective: 40bp Sep, 78bp Nov, 119bp Dec, 157bp Jan and 232bp June.