Fed funds futures have captured a safe haven bid
Fed funds futures have captured a safe haven bid after the sharp plunge in existing home sales added to the erosion in equities and the increasingly pessimistic outlook on U.S. and global growth. There's been talk of a recession by 2020 as well, with some worries over a Fed mistake. Indeed, there's been talk the December tightening was an error. The subsequent softening in Fedspeak this year toward patience and flexibility has seen a bullish reaction in the futures, with the slide in implied rates showing only slim chance for another tightening this year. The futures are also showing a better chance for a rate cut than a hike by mid 2020. Analysts still see sufficient momentum in the economy over the first half of the year to keep the FOMC in play, however.