{"id":231601,"date":"2024-06-12T21:37:28","date_gmt":"2024-06-12T21:37:28","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/06\/12\/futures-vs-sep-on-the-fed-funds-rate-trajectory\/"},"modified":"2025-06-25T17:17:15","modified_gmt":"2025-06-25T17:17:15","slug":"futures-vs-sep-on-the-fed-funds-rate-trajectory","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/06\/12\/futures-vs-sep-on-the-fed-funds-rate-trajectory\/","title":{"rendered":"Futures vs. SEP on the Fed Funds Rate Trajectory"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div id=\"post-52544\">\n\t\t\t\t<!-- .entry-header --><\/p>\n<div class=\"entry-content\">\n<p>Here\u2019s a picture of the Fed funds pre- and post-CPI release\/FOMC SEP:<\/p>\n<p><a href=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cme12jun24.png\"><img fetchpriority=\"high\" fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-52545\" src=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cme12jun24.png\" alt=\"\" width=\"864\" height=\"604\" srcset=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cme12jun24.png 864w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cme12jun24-300x210.png 300w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cme12jun24-768x537.png 768w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cme12jun24-624x436.png 624w\" sizes=\"(max-width: 864px) 100vw, 864px\"\/><\/a><\/p>\n<p><em><strong>Source:<\/strong> <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\">CME<\/a> accessed 6\/12\/2024, 1:30pm.<\/em><\/p>\n<p>\u00a0<\/p>\n<p>Before the news, the implied drop over 2024 was 35 bps, now 39 bps. How many drops? Using modal probabilities:<\/p>\n<p><a href=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cmemod12jun24.png\"><img decoding=\"async\" class=\"alignnone size-full wp-image-52546\" src=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cmemod12jun24.png\" alt=\"\" width=\"864\" height=\"604\" srcset=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cmemod12jun24.png 864w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cmemod12jun24-300x210.png 300w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cmemod12jun24-768x537.png 768w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/06\/ffpix_cmemod12jun24-624x436.png 624w\" sizes=\"(max-width: 864px) 100vw, 864px\"\/><\/a><\/p>\n<p><em><strong>Source:<\/strong> <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\">CME<\/a> accessed 6\/12\/2024, 1:30pm.<\/em><\/p>\n<p>Two 25 bps drops before, two drops after the news.<\/p>\n<p>Current commentary stresses that the close balance between one and two cuts in the SEP (see SEP <a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/files\/fomcprojtabl20240612.pdf\">here<\/a>).<\/p>\n<p>Market expectations (i.e., ex ante measures) are important for behavior. Which one will turn out to be more accurate in terms of forecasting. This issue is taken up in <a href=\"https:\/\/econbrowser.com\/archives\/2024\/06\/guest-contribution-market-participants-versus-rate-setters-a-forecasting-horse-race\">Carpinelli et al. (2024)<\/a>.<\/p>\n<\/p><\/div>\n<p><!-- .entry-content --><\/p>\n<footer class=\"entry-meta\">\n\t\t\tThis entry was posted on <a href=\"https:\/\/econbrowser.com\/archives\/2024\/06\/futures-vs-sep\" title=\"1:27 pm\" rel=\"bookmark\"><time class=\"entry-date\" datetime=\"2024-06-12T13:27:35-07:00\">June 12, 2024<\/time><\/a><span class=\"by-author\"> by <span class=\"author vcard\"><a class=\"url fn n\" href=\"https:\/\/econbrowser.com\/archives\/author\/menzie_chinn\" title=\"View all posts by Menzie Chinn\" rel=\"author\">Menzie Chinn<\/a><\/span><\/span>.\t\t\t\t\t\t\t\t<\/footer>\n<p><!-- .entry-meta -->\n\t<\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/econbrowser.com\/archives\/2024\/06\/futures-vs-sep\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Here\u2019s a picture of the Fed funds pre- and post-CPI release\/FOMC SEP: Source: CME accessed 6\/12\/2024, 1:30pm. \u00a0 Before the news, the implied drop<\/p>\n","protected":false},"author":1,"featured_media":231602,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[155],"tags":[],"_links":{"self":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/231601"}],"collection":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/comments?post=231601"}],"version-history":[{"count":0,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/231601\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media\/231602"}],"wp:attachment":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media?parent=231601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/categories?post=231601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/tags?post=231601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}