U.S. inflation momentum and Fed repricing shift
Key Questions
What is the current nowcast for US CPI inflation?
Sticky CPI nowcast stands at 3.3-3.5%, with services at 3.5% and expectations at 3.4%. Oil de-escalation supports higher year-end Fed cut odds at 60%.
How has the Iran ceasefire affected Fed cut expectations?
Markets repriced Fed cut odds upward, doubling in some views, from near 0% post-de-escalation. OIS now prices 60% chance of year-end cuts.
What are Jamie Dimon's warnings on inflation?
Dimon highlights persistent inflation and energy shocks from geopolitical risks, potentially keeping Fed rates higher for longer. He contrasts with reviving cut narratives.
What labor market indicators are noted?
NFP at 178k, JOLTS, and ISM at 52.7 indicate resilient labor amid sticky inflation. This balances against fiscal and UST dynamics.
How do consumer inflation expectations look?
Americans expect higher inflation for 2026, rising to 3.4% per Fed survey. Services sector pressure surges, challenging rate cut hopes.
What are market dot plot expectations for Fed rates?
Market dots at 3.5-3.75%, with hike odds fading post-oil drop. Banks like JPM and Wells Fargo see cuts delayed or less likely.
What key Fed events are upcoming?
Fed minutes and April 29-30 meeting debate pivot on oil/labor vs fiscal. Williams sees 2.5% core as anchor, with forecasts raised to 2.7% for 2026.
Why the shift in Fed repricing?
De-escalating oil prices lift cut odds versus prior hawkish views from energy shocks. White House cites productivity for cuts, but services inflation pressures persist.
Sticky CPI nowcast3.3-3.5%+/services3.5%/exps3.4%/NFP178k/JOLTS/ISM52.7 but de-escal oil drop lifts OIS 60%YE cuts (from 0%); Dimon/JPM hawk vs cuts revive/mkt dot3.5-3.75%/hike odds fade. Why: oil/labor vs fiscal/UST; mins Apr29-30 debate pivot.