FOMC Preview: No More Cuts
Summary
After the remarkable December flip-flop, when - just three months after the September jumbo rate cut - the Fed announced the most hawkish rate cut in its history, expectations for the Fed have been rather choppy as a hot December jobs report saw markets price in just one 25bps rate cut for the year with several banks revising their rate cut projections, with some even expecting no more rate cuts. However, as Newsquawk reminds us, a soft CPI and PPI report thereafter saw pricing reverse the post-NFP hawkishness, with markets back to pricing in about 40bps of easing this year, which fully prices one cut with a 60% probably of a second by year-end.