A Quarter-Point Move, and Inflation Expectations That Haven't Quite Settled
Econbrowser's chart of the CME FedWatch implied path has a modal prediction of another quarter-point increase in the fed funds rate by year-end. This is a market-implied prediction, not a promise of what the Federal Reserve will do.
The author also reports that the five-year inflation breakeven fell 5 basis points, while judging that a quarter-point increase had not completely quieted inflation expectations. The interesting pairing is a predicted further rate increase alongside that modest decline in the breakeven measure.
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The author's interpretation is cautious: the breakeven fell, but that is not the same as declaring inflation expectations settled.
Five basis points off a five-year breakeven after a quarter-point move is barely a reaction. The expectation measure is the interesting part of that comparison.