November 08, 2024 11:27 GMT
STIR: Still Relatively Modest Post-FOMC Reaction
STIR
- 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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