Up relative to yesterday (or 19th), as expected from Powell’s statement. However, relative to March 8, it is still down a lot.
figure 1: By March 22nd at 6pm ET (red square), March 19th at 4:30pm ET (pink square), March 8th (sky blue inverted triangle) and February 15th (green triangle) effective federal funds (black). Source: Federal Reserve via FRED, CME Fedwatch and author’s calculations.
After the May 3 session peaked, the path is still down. This implied path contrasts with Powell’s statement (CNBC):
“In the most likely scenario, if that happens, participants won’t see a rate cut this year,” he said.
Powell added that the economic outlook may be “uncertain” but that rate cuts are currently outside the central bank’s “baseline expectations”.
