BNP Paribas Rates Strategy on Fed Outlook (with Tom Mackenzie)

explicit

NDX

RUT

Oil

Metals

USD

BNP Paribas 8.5
Investment Bank $600.00B
Camille de Courcelles 7.5

yields

We expect another two cuts in March and June Additional expected cuts in March and June suggest continued downward pressure on yields

12 calls

-3

no reliable edge (random outcomes)

Show all 3 yields results

Do you think Jay Powell persuades the FOMC to get behind a cut in December? Why?

Tom Mackenzie
Camille de Courcelles

We think the Fed will cut in December as risk management cuts despite relatively resilient data, similar to September and October cuts

The Fed is still in restrictive territory and data has been sufficiently balanced to allow risk management cuts
Camille de Courcelles

We expect another two cuts in March and June, with Fed more concerned by labor market risks than inflation

As long as tariff inflation does not accelerate too much more than expected
Camille de Courcelles

We prefer to be positioned in the belly of the Treasury curve from 10-year to billions

Front end not appealing because market pricing for lending is very low, while longer end risks inflation reacceleration if Fed continues cutting with resilient economy