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STIR: Fed Rate Path Continues Post-PPI Decline

STIR
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  • Fed Funds implied rates have continued to slowly push lower in the hours since the PPI report. 
  • That’s not so much for the September meeting, where there weren’t enough dovish areas to materially push back closer to 50bps again ahead of tomorrow’s CPI release, but increasingly so further out. 
  • Cumulative cuts from 5.33% effective: 40.5bp Sep (+1.5bp post-data), 75bp Nov, 108bp Dec (+5.5bp), 133bp Jan and further out 192bp June. 
  • Nearest meetings in particular still hold a sizeable part of the increase seen after last week’s larger than expected decline for jobless claims – see table. 
  • CPI preview here: https://roar-assets-auto.rbl.ms/files/65736/USCPIPrevAug2024.pdf
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  • Fed Funds implied rates have continued to slowly push lower in the hours since the PPI report. 
  • That’s not so much for the September meeting, where there weren’t enough dovish areas to materially push back closer to 50bps again ahead of tomorrow’s CPI release, but increasingly so further out. 
  • Cumulative cuts from 5.33% effective: 40.5bp Sep (+1.5bp post-data), 75bp Nov, 108bp Dec (+5.5bp), 133bp Jan and further out 192bp June. 
  • Nearest meetings in particular still hold a sizeable part of the increase seen after last week’s larger than expected decline for jobless claims – see table. 
  • CPI preview here: https://roar-assets-auto.rbl.ms/files/65736/USCPIPrevAug2024.pdf