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STIR: Fed Funds Little Changed With Dec Pause Still Considered

STIR
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  • Fed Funds implied rates are near unchanged from Friday’s close.
  • It sees rates for the next two meetings close to last week’s highs primarily on growing pause talk but combined core PCE implications, whilst meetings further into 2025 hold more modest net retracement of Wednesday’s CPI-induced decline.
  • Cumulative cuts from 4.58% effective: 15bp Dec, 23bp Jan, 38bp Mar and 56bp June.
  • See our summary of the notable shift in Fedspeak from Friday’s US Macro Weekly (here).  
  • Ahead, Chicago Fed’s Goolsbee (’25 voter) gives welcome remarks at 1000ET with no prepared text. Market impact should be limited owing to the format and the fact he spoke on Friday saying current policy is still restrictive, he sees rates coming down along the lines of the dot plot (itself a relatively hawkish shift for recently the most dovish member of the FOMC) and that dispute on the neutral rate could support slower cuts. 
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  • Fed Funds implied rates are near unchanged from Friday’s close.
  • It sees rates for the next two meetings close to last week’s highs primarily on growing pause talk but combined core PCE implications, whilst meetings further into 2025 hold more modest net retracement of Wednesday’s CPI-induced decline.
  • Cumulative cuts from 4.58% effective: 15bp Dec, 23bp Jan, 38bp Mar and 56bp June.
  • See our summary of the notable shift in Fedspeak from Friday’s US Macro Weekly (here).  
  • Ahead, Chicago Fed’s Goolsbee (’25 voter) gives welcome remarks at 1000ET with no prepared text. Market impact should be limited owing to the format and the fact he spoke on Friday saying current policy is still restrictive, he sees rates coming down along the lines of the dot plot (itself a relatively hawkish shift for recently the most dovish member of the FOMC) and that dispute on the neutral rate could support slower cuts.