Up relative to yesterday (or the 19th), as expected given Powell’s statement. However, still way down relative to March 8th.
Figure 1: Effective Fed funds (black), implied Fed funds as of March 22 6PM CT (red square), March 19, 4:30 CT (pink square), March 8 (sky blue inverted triangle), and February 15 (green triangle). Source: Fed via FRED, CME Fedwatch and author’s calculations.
The path is still downward, after a peak at the May 3 meeting. This implied path contrasts with Powell’s statement (CNBC):
“In that most likely case, if that happens, participants don’t see rate cuts this year,” he said.
Powell added that what lies ahead for the economy may be “uncertain,” but rate cuts are not currently in the central bank’s “baseline expectation.”