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STIR: Fed Nov Cut Not Fully Priced Before CPI, Williams Leads Post-Data Speak

STIR
  • Fed Funds implied rates are marginally lower than pre-FOMC minutes levels for the Nov meeting but beyond that 1-2bp higher heading towards US CPI and jobless claims (CPI Preview here).
  • Cumulative cuts from 4.83% effective: 21bp Nov, 44bp Dec, 63bp Jan and 111bp June.
  • Daly (’24 voter) late yesterday echoed Powell in saying last month’s 50bp cut was a necessary “recalibration” as high real rates were a recipe for breaking the economy. There was little specifically on the strength of Friday’s payrolls report, instead characterizing the labor market as having downshifted to a sustainable pace (sentiment that has recently been reflected across FOMC members). She sees one or two more cuts this year.
  • Williams’ (voter) keynote remarks at 1100ET are likely the pick of today’s Fedspeak including text and Q&A. He has already spoken since payrolls but it offers a more detailed post-CPI take and could see pushback against Nov ‘skip’ odds. He told the FT that the jobs report showed the economy in good health. The 50bp cut in September was not a “rule of how we act” in the future, echoing Powell, but the goal is to move interest rates to a neutral setting with forward looking indicators closer to target.
  • Before that, Barkin (’24 voter) can also be notable in a fireside chat on the economic outlook at 1030ET (no text). He deemed it too early to declare victory over inflation and saw significant uncertainty on both inflation and employment on Oct 2 (pre-payrolls).
  • Gov. Cook (voter) talks on entrepreneurship and innovation at 0915ET (text + Q&A). 
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  • Fed Funds implied rates are marginally lower than pre-FOMC minutes levels for the Nov meeting but beyond that 1-2bp higher heading towards US CPI and jobless claims (CPI Preview here).
  • Cumulative cuts from 4.83% effective: 21bp Nov, 44bp Dec, 63bp Jan and 111bp June.
  • Daly (’24 voter) late yesterday echoed Powell in saying last month’s 50bp cut was a necessary “recalibration” as high real rates were a recipe for breaking the economy. There was little specifically on the strength of Friday’s payrolls report, instead characterizing the labor market as having downshifted to a sustainable pace (sentiment that has recently been reflected across FOMC members). She sees one or two more cuts this year.
  • Williams’ (voter) keynote remarks at 1100ET are likely the pick of today’s Fedspeak including text and Q&A. He has already spoken since payrolls but it offers a more detailed post-CPI take and could see pushback against Nov ‘skip’ odds. He told the FT that the jobs report showed the economy in good health. The 50bp cut in September was not a “rule of how we act” in the future, echoing Powell, but the goal is to move interest rates to a neutral setting with forward looking indicators closer to target.
  • Before that, Barkin (’24 voter) can also be notable in a fireside chat on the economic outlook at 1030ET (no text). He deemed it too early to declare victory over inflation and saw significant uncertainty on both inflation and employment on Oct 2 (pre-payrolls).
  • Gov. Cook (voter) talks on entrepreneurship and innovation at 0915ET (text + Q&A).