Traders Increase Bets on 2019 Fed Easing After ISM Slumps
- Fed funds futures now imply 64.5 basis points of 2019 easing
- ISM Manufacturing index unexpectedly contracted in August
Photographer: Luke Sharrett/Bloomberg
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Traders of fed funds futures boosted the amount of easing they expect from the U.S. central bank this year after American factory activity unexpectedly contracted in August for the first time in three years.
January fed funds futures indicate a rate of 1.485% at the end of 2019, having indicated 1.54% just before the release Monday’s data. With an effective fed funds rate currently at 2.13%, that implies around 64.5 basis points of reductions this year.