Wage Growth vs. Fed Funds Rate When wage growth lags behind the fed funds rate, it is interpreted as a sign that monetary policy is restrictive, as borrowing costs exceed the pace of income growth, potentially dampening consumer spending and economic activity. Image: Yahoo Finance
Fed Funds Rate – Target Probabilities at the Fed’s FOMC Meeting Traders show little optimism for a Fed rate cut at the May 7, 2025 FOMC meeting, with market expectations assigning just a 4.4% probability of a 25 bps reduction. Image: CME Group
Fed Funds Rate and Fed Funds Futures Deutsche Bank expects the Fed to cut rates by 25 bps at the December 2025, January 2026, and March 2026 meetings, bringing the Fed funds rate to a 3.5–3.75% range, aligning with their neutral rate projection. Image: Deutsche Bank
Market-Implied Fed Funds Rate and 2-Year U.S. Inflation Swap Current market pricing of Fed rate cuts indicates a pivot from inflation worries to growth concerns, suggesting investors expect the Fed to prioritize economic stability over aggressive inflation control. Image: Deutsche Bank
Fed Funds Rate Goldman Sachs expects the Fed to implement two 25 basis point rate cuts in 2025, with an additional cut projected for 2026. How will the Fed navigate potential increases in trade tariffs under the Trump administration? Image: Goldman Sachs Global Investment Research
Fed Funds Futures Markets are still pricing in Fed rate cuts for 2025, but expectations have been scaled back due to persistent inflation concerns. Image: Deutsche Bank
Implied Fed Funds Target Rate The Fed has revised its 2025 projections, now anticipating only two rate cuts instead of four, with future reductions dependent on the progress made in managing inflation. Image: Bloomberg
Interest Rates – Implied Fed Funds Target Rate The Fed is likely to cut rates by 25 basis points today, but projections for 2025 indicate a more gradual easing strategy, aiming to boost the economy while keeping inflation in check. Image: Bloomberg
Fed Funds Futures The market has scaled back its outlook for Fed rate cuts in 2025, with current projections showing three cuts, down from earlier forecasts. Image: Bloomberg
Fed Funds vs. 2-Year U.S. Treasury Yield (Leading Indicator) The current 2-year U.S. Treasury yield, sitting below the fed funds rate, indicates that the Fed’s monetary policy is restrictive. Historically, the 2-year yield tends to lead the fed funds rate by approximately 20 weeks. Image: Bloomberg
Market-Implied Change in Fed Funds Rate Traders are anticipating a total of 75 bps in interest rate cuts by the Federal Reserve over the next 12 months. Image: Goldman Sachs Global Investment Research