Another Move In Market's Perception Of Fed Interest Rate Hikes Sooner For Longer

I created the above graph in Excel manually typing in numbers as there is no data download from CME FedWatch. 

Higher Sooner, For Longer

This week, the market moved forward the terminal forward by two months from September to July. 

I ignore a 1 basis point difference, 5.36 percent in September compared to 5.35 percent in July.

In December, the market took back an eighth of a point rate cut, meaning higher for longer.

In little over a month, the December interest rate weighted average expectation went from 4.32 percent to 5.14 percent. That's a big move.

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The Industrial production, housing reports, and Philadelphia Fed manufacturing reports were weak.

The CPI, PPI, and retail sales were more inflationary than expected.

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