🏦🔻Market Adds to Bets Of Another 50Bps Fed Rate Cut: Cable FX Macro

• Fed pricing has gained speed since last week's oversized interest rate cut. However, brakes must be checked as the market may be getting ahead of itself despite the recent softness in U.S. data

• Last week's rate cut could have been justified by Taylor Rule inputs, some of which have been in place since July. November is still some time away, but the amount of data available until then will be limited

• As of time of writing, a 50bps rate cut in November has been assigned a 70% chance by swaps, this compares to 46% on Friday. The chart below shows a commodity index leading the Fed Funds Rate. That swing lower justifies deflationary fears and if nothing funny happens over the next 12 months, then the Fed landed the plane safely