Timiraos: September rate cut is ‘close to a lock’

The WSJ Fedwatcher Nick Timiraos is out with his take on today’s CPI and he says:

• September rate cut from the Fed as close to a lock as these things get
• This report makes it easier at the margin to avoid dissents on the first cut
• To get 50 bps, you’d probably need to see something bad in the labor market
• Intrigue at Sept FOMC will be the dot plot and how many cuts it shows
• More mild inflation readings could make three cuts as the baseline more likely

The Fed funds futures market at the moment is pricing in a 41% chance of 50 bps and 59% chance of 25 bps.

This article was written by Adam Button at www.forexlive.com.