Fed funds futures are little changed today
Fed funds futures are little changed today, but with small losses in the deferred contracts. Chair Powell's testimony largely validated an easing at the upcoming July 30, 31 FOMC. But it's only likely to be a 25 bp cut and the market has been pricing out chances for a 50 bp cut over the last couple of sessions. The Fed chief didn't signal any urgency for an aggressive cut, while better than expected jobs data and hotter inflation numbers have added to the likelihood of only a modest rate reduction. Fed dove, and voter Bullard also said a 50 bp move wasn't needed currently. The deferred contracts are heavier today following the PPI, though are still priced for 50 bps in rate cuts this year. Prospects for 75 bps have been eroding as well. Analysts suspect the July easing will be a one-and-done.