FOMC T-Minus 1 Day; NFTRH’s One and Only FOMC Post

So these people are sitting around this table today.


This is so important that the CME Group keeps a countdown going by which we can wait with baited breath.

fomc countdown

They actually have something useful too, which is the Fed Funds probabilities tool, based on FFR futures contracts. For September there will be no rate hike says this gauge and a whopping 98% of FFR traders.

fomc odds

As for November, the tool says it’s a 97% probability that the Fed sits on its hands. Then in December they throw the Hawks (I know, extinct, but work with me here… ) a bone with a 56% chance of a 1/4 point rate hike.

But let’s take a look at the Treasury bond market for a moment. We are getting a pop in inflation expectations, as interpreted by the TIP/IEF gauge.

tip/ief ratio

And of course nominal interest rates have been bouncing. Of course, these are just normalizing back to trend (which has been down). Here are the 30, 10 and 5 year yields. The shorter you get down the curve the firmer yields have been. That has an implication of a firm Fed (ha ha ha… ).

interest rates

And indeed, the 10/2yr yield curve is still well under control, which implies that the eggheads sitting around the table at the top of the post are well in control. But one can dream, can’t one?

yield curve

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