Fed Funds Futures Show 45% Probability of July Rate Hike Ahead of CPI Data
Fed funds futures indicate a 45% chance of a rate hike at the July 29 FOMC meeting, with the outcome hinging on tomorrow's CPI report and Warsh's testimony. A hike could help stabilize rising yields, according to market analysts.
1/5 The fed funds futures have a HIKE at the end of the month (July 29) at 45%! (55% no move) Tomorrow morning's CPI report and Warsh's testimony will decide it. -- "When the Fed starts panicking, I can stop panicking." A hike stops rising yields; root for it. 🧵
3/5 Tomorrow's CPI report/Warsh's testimony (House at 9 AM) will decide. Our June CORE CPI expectations (the metric that counts here) * 0.3% = Fed hikes on July 29th * 0.2% = We debate a July 29th or Sept 16th (next meeting) hike. Sept hike now 104%! * 0.1% = Sept 16th Hike
2/5 The fed funds futures market now puts a July 29 HIKE (at the next FOMC meeting) at 45%. (55% no move)
5/5 Should the Fed raise rates? I think the phrase that describes this period is at the top of this chart "When the Fed starts panicking, I can stop panicking" The top panel is the 10-year inflation break-even rate, and the bottom panel is the 10-year yield The red area shows when the Fed was h
Fed rate hike bets rise ahead of June CPI data, Warsh hearing