Hot US Inflation Chops Down Cut Pricing

From scotiabank.com

Forget rate cuts in 2024? That’s a very distinct possibility. The whole front-end blew up after another strong inflation reading out of the US. The result drove a nearly instant response from markets as fed funds futures almost entirely wiped out pricing for a June cut by the FOMC. We might need to push out our own Q3 start and reduce if not eliminate easing. Markets are now pricing about a half percentage point cumulative rate cut by year-end at most. The US two-year Treasury yield is up 19bps on the day so far with a bear flattening overall curve, a stronger dollar and with the S&P losing ground. Core ... (full story)