Fed funds futures are unchanged to lower
Fed funds futures are unchanged to lower, giving up earlier gains, in the aftermath of the stronger than expected claims data. Trading is on the light side, however, muted by tomorrow's jobs report. The futures are still reflecting a steady, patient stance on rates into Q3, though the market continues to price in an easing bias later in the year, with a 25 bp cut priced in by the end of Q1 2020. Analysts're still more sanguine on the economy's growth potential and expect a measurable acceleration in growth this quarter, along with a pick up in some inflation measures in 2H, that could put the FOMC back on a tightening track in Q3, especially if it ends QT in September and the Committee holds true to its data dependency mantra.