Federal Reserve’s Governor Chris Waller, known in Interest Rates trading to provoke volatility, appeared on an interview with CNBC saying that “The Fed is in position as early as July for cuts.”
Fed Funds Futures haven’t changed too much in terms of pricing of a cut (from 14% to 15% of a cut) but with such comments, expect big moves on any US Data that shows a weaker Economy.
For a reminder, the Federal Reserve has been in pause since 6 months after cutting by 50bps in December 2024 as the FED “adjusted the policy rate with the dual mandate moving in the right direction”.
Waller mentioned the waiting of an inflation shock that never happened, something that is for now pretty accurate with the past few data points.
Waller notably mentioned high rates of unemployment for graduates and that with overall low unemployment in inflation that is in control, the Federal Reserve is well placed to cut a bit before seeing if further adjustments are warranted.
The 2 Year bonds are now yielding 20 bps less than before Waller appeared.
2 Year Yield 15m Chart
Dollar Index 15m Chart
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About the Author
Elior Manier
Market Analyst
Elior brings over seven years of experience in financial markets to our analyst team. Since 2018, he has actively engaged in observing, charting, and trading, driven by his passion for mastering market dynamics. With a profound understanding of the geopolitical and macroeconomic forces that shape market movements, Elior focuses on analysing the impact of breaking news, market sentiment, and critical economic data releases on trading flows.
As a versatile analyst, he contributes powerful insights to the team, effectively integrating geopolitical and technical analysis to provide clear and comprehensive market perspectives.
Prior to joining our team, Elior honed his expertise as a Fixed Income Trader and Market Analyst at the Montreal Exchange.
Elior brings over seven years of experience in financial markets to our analyst team. Since 2018, he has actively engaged in observing, charting, and trading, driven by his passion for mastering market dynamics. With a profound understanding of the geopolitical and macroeconomic forces that shape market movements, Elior focuses on analysing the impact of breaking news, market sentiment, and critical economic data releases on trading flows.
As a versatile analyst, he contributes powerful insights to the team, effectively integrating geopolitical and technical analysis to provide clear and comprehensive market perspectives.
Prior to joining our team, Elior honed his expertise as a Fixed Income Trader and Market Analyst at the Montreal Exchange.
