The June Fed decision is suddenly in play
The June 13 FOMC decision is no longer a sure thing.
Troubles in Europe, emerging markets and broader markets are weighing on the implied odds of a move. That shift comes despite no change in tone from Federal Reserve policymakers.
Fed funds futures pricing now shows a 74.8% chance of a hike, down from 83% on Friday and 97% at the start of the month.
To me, a hike is a slam dunk so there may be an opportunity to trade fed fund futures director or the US dollar. It would take a monumental round of risk aversion to shake out the Fed.
It will be key to listen to Fed officials this week for any sign of a change. Bullard, Bostic, Brainard, Kaplan and Kashkari are on the docket before June 1, when the blackout begins. Of those, Brainard is the only heavyweight and she speaks Thursday at 1700 GMT. The Beige Book is also due tomorrow.
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