MNI BRIEF: BOJ To Adjust Easy Policy Cautiously - Nakamura

MNI: PBOC Net Drains CNY153 Bln via OMO Thursday

MNI: PBOC Sets Yuan Parity Lower At 7.1879 Thurs; -1.82% Y/Y

MNI BRIEF: Fed's Daly Says No 'Urgency' To Lower Rates

MNI BRIEF: Powell Says US Is 'Far' From Fiscal Dominance

MNI BRIEF: US Firms Wary of Tariff-Related Inflation - Fed

MNI:AUSTRALIA OCT TRADE BALANCE A$+5953

EZ/UK Bond Supply Calendar: Spain, France Auction, UK Tender

US EIA: CRUDE OIL STOCKS EX SPR -5.07M TO 423.4M NOV 29 WK

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

STIR: Fed Funds See 18bp Of Dec Cuts, Heavy Docket Ahead

STIR
BulletMarketsFixed Income Bullets
  • Fed Funds implied rates broadly consolidate yesterday’s decline which came ahead of JOLTS, primarily on geopolitical risk, but was subsequently supported by relatively dovish appearances from Daly & Kugler and a typically dovish Goolsbee.
  • It’s ahead of an important docket with ISM Services, Fedspeak including Powell and hawk Musalem as well as the Fed’s Beige Book with its increased importance with FOMC members leaning more heavily on anecdotal evidence amidst data noise.
  • Cumulative cuts from 4.58% effective: 18.3bp Dec, 25bp Jan, 39bp Mar and 59bp Jun.
  • Fed Chair Powell headlines today’s Fedspeak, in a moderated discussion at the NYT DealBook Summit at 1340ET (no text). We also hear from Barkin (’24), Musalem (’25) and Daly (’24) along with the Fed’s Beige Book. We watch Musalem at 0845ET for his keynote address, being one of the most hawkish FOMC members who in Nov 13 comments viewed “gradual” cuts as appropriate if inflation keeps falling (can “judiciously and patiently” evaluate incoming data), but that he would have preferred if three-month core CPI had continued to fall and that the risk of labor market deterioration is possibly lower.  

 

  • Powell context: He last spoke Nov 14 when his prepared remarks cemented the apparent hawkish shift since the FOMC 6-7 meeting. While his main comments were largely verbatim from the FOMC press conference Q&A, the impact was more pronounced by the fact that he included these in his prepared remarks rather than making them off-the-cuff - and the likelihood that he was expressing his own personal views moreso than at the press conference (which tends to reflect the FOMC consensus).
  • However, there has been a greater shift this week to pointing towards a 25bp cut in December rather than the pause that markets had increasingly weighed up, led by Governor Waller on Monday.
  • If asked on tariff impacts, expect Powell to reserve judgement. “For sure at our December meeting, the staff will present on what we know. But policies in several areas will change; when it comes to fiscal policy it takes a long time to get a bill through Congress. It'll be 2026 or 2027 to take effect. That's not to say we won't be doing a lot of analysis. But we'll be careful about changing policy until we get a lot more certainty.
377 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • Fed Funds implied rates broadly consolidate yesterday’s decline which came ahead of JOLTS, primarily on geopolitical risk, but was subsequently supported by relatively dovish appearances from Daly & Kugler and a typically dovish Goolsbee.
  • It’s ahead of an important docket with ISM Services, Fedspeak including Powell and hawk Musalem as well as the Fed’s Beige Book with its increased importance with FOMC members leaning more heavily on anecdotal evidence amidst data noise.
  • Cumulative cuts from 4.58% effective: 18.3bp Dec, 25bp Jan, 39bp Mar and 59bp Jun.
  • Fed Chair Powell headlines today’s Fedspeak, in a moderated discussion at the NYT DealBook Summit at 1340ET (no text). We also hear from Barkin (’24), Musalem (’25) and Daly (’24) along with the Fed’s Beige Book. We watch Musalem at 0845ET for his keynote address, being one of the most hawkish FOMC members who in Nov 13 comments viewed “gradual” cuts as appropriate if inflation keeps falling (can “judiciously and patiently” evaluate incoming data), but that he would have preferred if three-month core CPI had continued to fall and that the risk of labor market deterioration is possibly lower.  

 

  • Powell context: He last spoke Nov 14 when his prepared remarks cemented the apparent hawkish shift since the FOMC 6-7 meeting. While his main comments were largely verbatim from the FOMC press conference Q&A, the impact was more pronounced by the fact that he included these in his prepared remarks rather than making them off-the-cuff - and the likelihood that he was expressing his own personal views moreso than at the press conference (which tends to reflect the FOMC consensus).
  • However, there has been a greater shift this week to pointing towards a 25bp cut in December rather than the pause that markets had increasingly weighed up, led by Governor Waller on Monday.
  • If asked on tariff impacts, expect Powell to reserve judgement. “For sure at our December meeting, the staff will present on what we know. But policies in several areas will change; when it comes to fiscal policy it takes a long time to get a bill through Congress. It'll be 2026 or 2027 to take effect. That's not to say we won't be doing a lot of analysis. But we'll be careful about changing policy until we get a lot more certainty.