Fed Implied Funds Peak – September to May
Using CME futures, as of 1:30 CT today:
Picture 1: Fed effective funds (black), Fed implied funds at 1:30 CT on March 15 (red square), March 14 (pink square), March 8 (sky blue inverted triangle), and February 15 (green triangle). Source: Fed via FRED. CME Fedwatchas of March 15, 13:40 CT, and author’s calculations.
Two pieces of news today – the first was about Credit Suisse, the second – macroeconomic news, where PPI is underestimatedas well as retail sales (slightly). I assume financial stress prevailed.
Interestingly, the trajectory was higher a week ago than it was a month ago, which is likely due to Chairman Powell’s rather hawkish comments about maintaining inflation and subsequent Fed policy. In this context, the decline in the estimated path of Fed funds is all the more remarkable.