Until today, 100 basis points of Fed easing remained something of a ceiling for what the market was willing to price in. However yesterday's dovish comments from Waller changed the equation and late yesterday Bill Ackman piled on, talking about a Q1 cut.
Barkin pushed back today but also said that market bets on four rate cuts next year might be based on expectations for soft landing, and "I hope they are right." That indicates at least an openness to cutting if the data cooperates. Add in constructive comments from Bostic and the 100bps ceiling has broken.
Now the Fed funds futures market is pricing in a full cut at the May 1 meeting and 115 bps of easing by year-end 2024.
You can increasingly see that trade manifest itself in US 2s, which are down another 8.4 bps today and appear to be breaking down.
