The Fed rate path is pushing higher again having initially fully reversed a spike on unsubstantiated and subsequently refuted headlines around a 90-day pause in tariffs.
The speculation-driven spike aside, it’s back close at Friday’s close for near-term meetings and a little above for meetings from September onwards.
Cumulative cuts from an assumed 4.33% effective: 12.5bp for May (vs 16bp at the NY crossover), 35bp Jun (vs 40bp), 57.5bp Jul (vs 66bp) and 99bp Dec (vs 112bp).
Inter-meeting cut odds still haven’t fully receded though, showing ~2bp of cuts priced in the April FF contract vs closer to 6.5bp of cuts at one point overnight. Today’s regular Board of Governors meeting at 1130ET could be helping that despite being a purely routine event as noted earlier.
There have been larger reversals of the overnight rally further out the curve: SOFR futures show terminal yields at 3.14% (in the SFRU6) after a ~20bp lift since the NY crossover. It’s now +8.5bp from Friday to limit the slide to ~25bps since Liberation Day tariffs.