On The Radar: What is the federal funds futures market telling us about future Fed activity?

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OnTheRadar
July 2019
FAQs on the Markets and Economy
On the Radar is a biweekly publication providing quick and concise answers to the topical investment and economic questions that are on investors' minds.
New questions in this issue:
1.
What is the federal funds futures market telling us about future Fed activity?
The December contract of federal funds futures market is currently pricing in a total of 50 bps in cuts this year. In the past year, expectations have swung from 50 bps in hikes (last autumn) to 75 bps in cuts (a few weeks ago).
2.
What did we learn from the recent labor report?
The June labor report was solid with gains in nonfarm payrolls leaping 224,000, much stronger than the 72,000 gain in May.
3.
What is happening to the yield curve?
The traditional view of the yield curve, the variance between the federal funds rate and the ten-year treasury note, has been inverted since late May.
4.
Is the outlook for stocks still positive?
We continue to have enough confidence in the economic outlook and see sufficient scope for earnings growth, to remain positive on U.S. Equites.
5.
What is City National Rochdale's investment outlook?
Given our continued positive assessment of the fundamental backdrop, we remain positive on equities in general and continue to see attractive prospects in the opportunistic fixed income class.
Read More on CNR.com »
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