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STIR: Tech-Led Risk-Off Sees End-2025 Rates Back At Median FOMC Dot

STIR
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  • Fed Funds implied rates are sharply lower from Friday’s close on broad risk-off on the back of the tech-led equity sell-off.
  • This week’s decision is still seen as a lock-in for a pause, but a 25bp cut in March is starting to be seen as closer to 50/50 call with 10bp priced. June is still the next meeting with a 25bp cut fully priced though.
  • Fed Funds last priced >50bp of cuts for 2025 briefly before the hawkish Dec 18 FOMC decision and before that Dec 13. It leaves the end-2025 point back in line with the median FOMC dot from that decision, having climbed from the 32bp priced before CPI less than two weeks ago.
  • Cumulative cuts from 4.33% effective: 0.5bp Jan, 10bp Mar, 18.5bp May, 31bp Jun, 35.5bp Jul and 51bp Dec. 
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  • Fed Funds implied rates are sharply lower from Friday’s close on broad risk-off on the back of the tech-led equity sell-off.
  • This week’s decision is still seen as a lock-in for a pause, but a 25bp cut in March is starting to be seen as closer to 50/50 call with 10bp priced. June is still the next meeting with a 25bp cut fully priced though.
  • Fed Funds last priced >50bp of cuts for 2025 briefly before the hawkish Dec 18 FOMC decision and before that Dec 13. It leaves the end-2025 point back in line with the median FOMC dot from that decision, having climbed from the 32bp priced before CPI less than two weeks ago.
  • Cumulative cuts from 4.33% effective: 0.5bp Jan, 10bp Mar, 18.5bp May, 31bp Jun, 35.5bp Jul and 51bp Dec. 
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