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STIR: Fed Funds With 42bp Of Cuts Priced For Tomorrow's FOMC

STIR
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  • Fed Funds implied rates hold yesterday’s two-stage step lower (first with the Asian open and then late in the US session).
  • It’s on little new information but rather continued speculation that the FOMC could cut by 50bps tomorrow (Fed Funds have 41.8bp priced, OIS 38.1bp).
  • Cumulative cuts from 5.33% effective: 42bp Sep, 78bp Nov, 119bp Dec, 157bp Jan and 233bp June.
  • Retail sales could well have an outsized impact at cementing pricing for a 50bp cut if there are signs of weakness, whilst it feels like a beat would have to be particularly large to shift pricing closer to a 25bp cut at this juncture. 
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  • Fed Funds implied rates hold yesterday’s two-stage step lower (first with the Asian open and then late in the US session).
  • It’s on little new information but rather continued speculation that the FOMC could cut by 50bps tomorrow (Fed Funds have 41.8bp priced, OIS 38.1bp).
  • Cumulative cuts from 5.33% effective: 42bp Sep, 78bp Nov, 119bp Dec, 157bp Jan and 233bp June.
  • Retail sales could well have an outsized impact at cementing pricing for a 50bp cut if there are signs of weakness, whilst it feels like a beat would have to be particularly large to shift pricing closer to a 25bp cut at this juncture.