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As traders persist in their call for an easing of US monetary policy, the data continues to defy their expectations. The US CPI for March is marginally higher at 3.5% year-on-year compared to consensus estimates of 3.4%. Consequently, bets for a FED rate cut in June have dissipated, as both the US Fed Funds Futures and Overnight Index Swaps now imply less than 20% probability of a rate cut in June.

This quarter, we improved the Interest Rates gauge to the neutral position to reflect the possible end of the Fed's rate hikes. Watch the full video and download our Guide to the Gauges commentary here: https://lnkd.in/erF4i8iq

The Macro Minute | August 14, 2024 In today's video, I answer the following question: - Will the July CPI report support Fed rate cut expectations? You can watch it here:

Fed rate hike in the paint 🎨(on the back of March hot 🥵 🔥inflation print)? That’s former Treasury Secretary Larry Summers’ take on the Fed’s next move, saying it’ll be a mistake if the Fed cuts in June🤷🏽♂️ #ratecuts #rates #treasurys #markets #nolanding #softlanding #hardlanding #monetarypolicy #fed #cpi #inflation #jeromepowell #larrysummers #hotinflation #stickyinflation #corecpi #coreinflation

Today at 8:30 am, US CPI for the month of April will be published. Consensus points towards a 3.4% YoY increase, after a 3.5% in March. PPI yesterday was in line with expectations (2.2%), but confirmed an upward trend, which is worrisome in terms of the overall picture for inflation and the implications for rates. Fed officials, through speeches, are trying to manage expectations about rates, while at the same time accepting the reality that inflation might be picking up slightly. The 10 Year U.S. Treasury has come down to 4.42% and the S&P500 is trying to regain its all time high while potentially forming a double top. The next FOMC meeting will take place on June 12, 4 weeks from today. Want to know more? join Fund@mental here https://lnkd.in/ewBZ9GK4 #iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation

The yield on the US 10-year Treasury note hovered around 4.15%, little changed from last week levels, with traders eagerly awaiting the US CPI report due Tuesday. Inflation is expected to continue to slow, reinforcing bets the Fed is set to cut interest rates this year. Investors have mostly given up on a March rate cut, which the odds currently standing around 17%, while a May easing stands around 90%. Meanwhile, market participants are also awaiting appearances by various Fed officials, hoping for insights into the timing of the Fed's monetary easing. #us #yield #fed #cpi #vtrades

Will It Be A 50 Bps Cut? No, it's not about July but about: the September policy. JayPo is not known for surprises, and thus, July looks off the table. However, before the September FOMC policy, the Fed will have 2 NFP releases and 2 CPI prints to decide the quantum of cut. The market is pricing in an 11.5% probability of a 50 bps cut in September. How will the risk assets react to a higher quantum of cut? Will bonds and Gold outperform? A lot of unanswered questions, but one can profit if he/she understands the macro and avoids the noise. Chart: Macrobond

While the Fed doesn't want to see changes unfold as it has, recent CPI reports have assisted prevailing in market expectations to thresholds and levels arguably more consistent with where they should be. Take a look at the graph below to see how financial conditions have loosened as Fed funds remained restrictive.

MARKETS IN FOCUS Tune in to the latest update in our video series of market insights provided by Aneep Maniar, CFA®, Portfolio Manager . Click the link below to view our video. KEY TAKEAWAYS » U.S. Core CPI Rises Slightly More than Expected » The Fed Rate Cut is Coming this Week » The Long-Term Fed Funds Target is Around 3% https://bit.ly/3z7fOMd

A stronger than expected US CPI print today sent rates markets sharply higher and drove a material repricing of Fed rate cut expectations. Inflation for March only printed marginally above consensus at 3.5% on the headline measure but the outsized reaction spoke to investors’ nervousness around Fed pricing for 2024. Faced with a strong labour market and persistent inflation, the market is beginning to question the need for easier policy in the US at the current juncture. The first rate cut has been pushed back from July to November and US Treasuries rose 20-25bp. We entered 2024 pricing about 6 rate cuts this year but after today’s release we’re now pricing less than 2! The trend in rates since the turn of the year is clear to see and at some point this rise in yields will likely drive a broader repricing of risk assets. Now, while there was some spillover into Euro and UK markets, this is primarily a US story and we continue to see a clear divergence between US and global central bank rate pricing. It’s unusual to see the ECB lead out on major policy turning points but for now they’re expected to beat the Fed to the first cut by 4-5 months. The ECB meet tomorrow (Thursday) and while no change is expected, Lagarde could firm up guidance for a June rate cut and the path for the rest of the year. #Bloomberg #Fed #ECB