Futures Show Quarter-Point Fed Rate Cut Fully Priced in for July
- Market increased bets on move after Fed released statement
- Contracts showing close to 75bp of cuts by end of 2019
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Bond traders are virtually certain that the Federal Reserve will ease policy as soon as next month after the central bank indicated a readiness to cut rates for the first time in more than a decade to sustain the U.S. economic expansion.
The rate implied for the July 31 Fed decision dropped by 7 basis points after Wednesday’s policy statement to about 2.06%. That suggests about 31 basis points of rate cuts by then. The January 2020 fed funds futures contract implies close to 75 basis points of easing by the end of 2019.