The Fed funds futures market is now pricing in 144 bps in cuts next year

Earlier this week, the Fed funds futures curve was pricing in 107 basis points of easing next year. That’s now up to 144 basis points.

Powell did nothing to push back on market expectations of cuts next year and the dot plot was similar. In the past month, few if any Fed officials have leaned against rate cuts next year.

The market is taking that as a green light and will continue to price in cuts.

Another way to see this is in the two-year, which is in a full-on jailbreak this year.

This article was written by Adam Button at Source