- Fed easing expectations shift with the market pricing in only 70% odds of a follow-up cut in December.
- The swaps market is pricing in around 50% odds of a December cut, showing a significant shift from September's pricing.
- The market is now pricing in 75 to100 bps of total easing over the next 12 months.
- In addition, investors are pricing in a terminal rate near 3.5% compared to 2.5% in September.
- Fed officials are likely to reinforce the cautious tone this week.
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