H2-25 cuts (bp)

20 ore fa

This custom TradingView indicator tracks and visualizes the implied pricing of Federal Reserve rate cuts in the market, specifically for the second half of 2025. It does so by comparing the price differences between two specific Fed funds futures contracts: one for June 2025 and one for December 2025. These contracts are traded on the Chicago Board of Trade (CBOT) and are a widely-used market gauge of the expected path of U.S. interest rates.

The indicator calculates the difference between the implied rates for June and December 2025, and then multiplies the result by 100 to express it in basis points (bps). Each 0.01 change in the spread corresponds to a 1-basis point change in expectations for future rate cuts. A positive value indicates that the market is pricing in a higher likelihood of one or more rate cuts in 2025, while a negative value suggests that the market expects the Fed to hold rates steady or even raise them.

The plot represents the difference in implied rate cuts (in basis points) between the two contracts:

June 2025 (ZQM2025): A contract representing the implied Fed funds rate for June 2025.

December 2025 (ZQZ2025): A contract representing the implied Fed funds rate for December 2025.

20 ore fa

Note di rilascio

This custom TradingView indicator tracks and visualizes the implied pricing of Federal Reserve rate cuts in the market, specifically for the second half of 2025, 2026, and 2027. It calculates and plots the implied difference in interest rates between the June and December contracts for each year—2025, 2026, and 2027—using the corresponding Fed Funds Futures contracts from the Chicago Board of Trade (CBOT). This allows users to track how the market expects the Federal Reserve to move with interest rates during the second half of each of these years.

The indicator compares the June and December Fed Funds Futures contracts for each year to determine the market’s expected changes in interest rates, with each difference expressed in basis points (bps). The difference is calculated by subtracting the December contract from the June contract for each year, then multiplying by 100 to convert the value into basis points (bps). A positive value indicates that the market expects the Fed to cut rates by the time it reaches the second half of the given year, while a negative value suggests that the market expects the Fed to hold rates steady or even raise them.

The indicator calculates the implied rate cut for:

2025 (H2-25): Difference between June 2025 (ZQM2025) and December 2025 (ZQZ2025).

2026 (H2-26): Difference between June 2025 (ZQM2025) and December 2026 (ZQZ2026).

2027 (H2-27): Difference between June 2025 (ZQM2025) and December 2027 (ZQZ2027).

Key Features:

Tracks market’s expected rate cuts for 2025, 2026, and 2027 by comparing the implied rates from futures contracts.

Visualizes changes in basis points (bps), making it easy to track shifts in rate cut expectations for these future years.

Useful for macroeconomic analysis: Shows how market sentiment evolves regarding future U.S. interest rate policy.

Dynamic updates: Reflects changes in market sentiment following major economic data releases, Fed statements, and macro events.

How to Use:

Monitor rate cut expectations: Watch for shifts in the plots, as changes in economic data and Fed policy could alter the market’s view of future rate cuts.

Interpret movements: A significant rise in the indicator suggests increasing expectations for rate cuts, while a decline may indicate that the market is pricing in a more hawkish stance by the Fed.

Combine with other indicators: This indicator can be used in conjunction with other macroeconomic data to understand how interest rate expectations influence asset prices, such as equities, crypto, or bonds.

Example Use Cases:

Macro analysis: Understand market sentiment regarding future Fed actions in response to economic data like inflation, employment, and GDP growth.

Trading strategy: Use this indicator to inform trading strategies that are sensitive to interest rate changes, such as those in high-growth sectors or inflation-hedged assets like cryptocurrencies.

Portfolio management: Investors can use this indicator to gauge the likelihood of an economic slowdown or tightening, and adjust their portfolios accordingly.

Bottom Line:
This indicator provides an easy-to-read visual of the market’s expectations for interest rate changes in 2025, 2026, and 2027. By tracking the implied rate cuts from the futures markets, users can quickly assess how the market is pricing the Fed’s future policy moves and adjust their strategies or risk exposure accordingly.