Wells Fargo Now Sees Just 50bp Of Cuts This Year, Vs 100bp Prior To CPI

Following today's CPI report, Wells Fargo has pared its Fed cut base case, now seeing just two 25bp reductions this year (one in Q3, one in Q4). Previously they'd forecast 100bp of cuts (25bp Q2, 50bp Q3, 25bp Q4).

• "Today's inflation data are likely to keep the FOMC's doves on the defensive while providing more ammunition to the Committee's hawks, who are increasingly of the view that there is no urgency to start cutting the fed funds rate."
• With a June cut and 75bp or more of cuts being the overwhelming base case for sell-side analysts following the March FOMC meeting, it would be surprising following the March payrolls and CPI data if we didn't see further downgrades in easing expectations going into the May 1 Fed decision.