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The market is now pricing in Fed cuts as soon as next month

I tend to think that market-watchers (and the FOMC) underestimate how much that Fed fund futures contracts are pricing in tail risks, rather than a real implied forecasts of where rates will be.You can see that in the price action today, with 5 bps of cuts now priced in for the June 14 meeting, or a 20% chance of a cut. The market also now sees 99 bps of easing before year end.One way of looking at that is that there's a 50% chance of a 200 bps cut and a 50% chance of no cut at all. That's becau... Read More

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Posted: May 4 2023, 16:56

Author Name: forexlive

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