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STIR: Still Relatively Modest Post-FOMC Reaction

STIR
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  • Fed Funds implied rates are little changed out to mid-2025 as they hold a very small decline compared to pre-FOMC levels, most of which came from Powell’s press conference.
  • Cumulative cuts from an assumed 4.58% effective: 19bp Dec, 29bp Jan, 47bp Mar and 69bp June.
  • Further out the curve, some disappointment in China fiscal stimulus relative to heightened expectations has seen larger rallies on the day, with SOFR implied yields 5bps lower through 2026 contracts.  
  • It sees a terminal rate of 3.69%, pointing to circa 90bp of cuts from here, compared to the median FOMC longer run dot of 2.75-3.0% from the September SEP.
  • See the MNI Fed Review here: https://media.marketnews.com/Fed_Review_Nov2024_c8498fe582.pdf
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  • Fed Funds implied rates are little changed out to mid-2025 as they hold a very small decline compared to pre-FOMC levels, most of which came from Powell’s press conference.
  • Cumulative cuts from an assumed 4.58% effective: 19bp Dec, 29bp Jan, 47bp Mar and 69bp June.
  • Further out the curve, some disappointment in China fiscal stimulus relative to heightened expectations has seen larger rallies on the day, with SOFR implied yields 5bps lower through 2026 contracts.  
  • It sees a terminal rate of 3.69%, pointing to circa 90bp of cuts from here, compared to the median FOMC longer run dot of 2.75-3.0% from the September SEP.
  • See the MNI Fed Review here: https://media.marketnews.com/Fed_Review_Nov2024_c8498fe582.pdf