When FOMC minutes go stale even before they are published

The minutes of the Federal Open Market Committee (FOMC) March meeting are well past their use-by date:

• FOMC minutes: Almost all members agreed it would be appropriate to pivot dovishly in 2024

Maybe they have some nutritional value left, I’ll concede ‘in 2024’ might mean a cut in, I dunno, September or December? More likely before the US Presidential election I guess. I mean the Fed is independent but not THAT independent 😉

On Wednesday we had the data show that

US core CPI rose higher than forecast for the third straight month:

• US March CPI 3.5% y/y versus 3.4% expected

Expectations for rate cuts shifted further, with markets now pricing something like 40bp worth of rate cuts for the year, compared to guidance in that March meeting of 75bp.

As for a June rate cut, FedWatch now has this at just 16%. I’ve been banging on, and on, that there will be no June rate cut:

• I reckon the likelihood is closer to 10%

Oil prices have been gaining all of this year = inflationary (among other inputs):

• Global economic recovery, blistering commodities rally … threatening to derail the Fed

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FedWatch now shows the probability of a June rate cut at 16%. Note that this is not a Q&A survey, it’s a probability derived from futures market pricing:

This article was written by Eamonn Sheridan at www.forexlive.com.