Fed funds futures are mixed with front month contracts under pressure
Fed funds futures are mixed with front month contracts under pressure as the market adjusts to the FOMC's dot plot and the shift to an estimate of four hikes this year, with the Fed still looking for three in 2019. The market is about fully priced for a 25 bp rate increase in September (skipping June 31-August 1 meeting), which is the next one with a press conference and economic projections. The chances for a December tightening have risen to about 65%. Deferred contracts are little changed to firmer after a rather balanced outlook from Fed Chairman Powell in his press conference as he said there are no signs inflation is taking off, and so by extension means the FOMC needn't turn aggressive for the foreseeable future.