Fed Pivot in December?
I’ve been saying that the fed is going to pivot. Looking at Eurodollar futures we are seeing that they are expecting another 100bps for the rest of the year (2022). Whether this is 75 and another 25 or 50/50 or 100bps all go that’s all the the market is expecting. We are also seeing Eurodollar futures saying the fed will pivot in December and my thesis has been September. However, it looks never the less chance of fed pivot are increasing. imageimage
Golden Lake Partners's avatar
Thank you for your take DPM. I'm a newbie currency analyst. On what graph are you seeing a FED pivot in September or December?
Deer Point Macro's avatar
@goldenlacllc hey good no problem. First chart Rhs is showing 99bps left for the rest of the year. The bottom chart where you’re seeing -2bps, you are seeing a clear pause and possible change of direction, as they are no longer flat they are -.
Dividend Dollars's avatar
What do you expect after another 100 bps this year?
Dividend Dollars's avatar
@deerpointmacro what that means isn’t clear to me. Additional increases, stabilization of rates, decrease in rates?
Deer Point Macro's avatar
@dividenddollars well right now it’s saying they will cut -2bps so pretty flat, so right now projecting slight slight cut in rates of only 2bps, but I’m assuming this will continue downwards.
Deer Point Macro's avatar
@deerpointmacro Eurodollar usually lead by about 3-6 months so we should see more rate cuts priced in as we get closer to December
ThomasFJE's avatar
Hmm.. bonds calling the FEDs bluff?