SHORT-TERM INTEREST RATE MONITOR
US STIR — Fed Funds Path
LIVEZQ FUTURESUpdated Tue, 14 Jul 2026 22:30:49 GMT
AI SYNTHESIS
claude-opus-4-8Internally inconsistent Fed page: regime label says "cutting" but the meeting path prices hikes through 2027.
EFFR sits at 3.62% and SOFR at 3.60% (basis -2bp), inside the 3.50–3.75% target band, so current conditions are neutral-to-stable. The page's regime tag ("CUTTING_ACTIVELY," terminal 2.83%, ~3.2 cuts) directly contradicts the actual ZQ-implied meeting path, which shows hikes: Jul 30 is 84% hold/16% hike, but Sep 17 flips to 71.7% hike25, Oct 29 to 94% hike25, and by Mar '27 the path prices 72% odds of a 50bp hike, lifting post_rate to ~4.05–4.07%. The cum_cuts series is negative (-0.16 to -1.82) all the way out, meaning the strip is pricing net tightening, not easing — the opposite of the headline narrative. The lone dovish data point is the Dec 9 '27 node (83.6% cut75, post_rate 2.83%), which looks like a data/rollover artifact rather than a coherent signal since it single-handedly produces the +3.16 cum_cuts and 2.83% terminal cited in the regime text. The near strip (ZQN26 3.63%, ZQU26 3.73%, ZQV26 3.80%, ZQX26 3.86%) confirms the market is leaning toward higher, not lower, rates over the next quarter.
CONDITIONAL ACTIONS
Treat the 'CUTTING_ACTIVELY' regime label and 2.83% terminal as unreliable this run — the actual meeting-path probabilities and negative cum_cuts point to tightening, so do not act on a duration-outperforms thesis derived from that label.
HIGHbasis: regime says cutting/terminal 2.83% while meeting_path shows hike25/hike50 dominance and cum_cuts negative (-0.16 to -1.82)
If the near-dated strip continues to price hikes (ZQU26 implied 3.725%, Sep 17 hike odds 71.7%) into the Jul 30 meeting, position for a higher-for-longer front end rather than cuts.
MEDIUMbasis: strip ZQN26 3.6275% rising to ZQX26 3.855%; Sep 17 71.7% hike25, Oct 29 94% hike25
Discount the Dec 9 '27 node (83.6% cut75, post_rate 2.83%) as a likely artifact until corroborated; it alone flips headline cum_cuts to +3.16 and drives the terminal figure.
MEDIUMbasis: Dec 9 '27 post_rate 2.83% and cum_cuts +3.16 vs all other nodes clustered 3.66–4.07% with negative cum_cuts
Watch credit spreads as the tiebreaker the page itself flags for hard-landing risk, since the rate signal here is contradictory and not decision-grade on its own.
LOWbasis: regime_description note that credit spreads signal hard landing; no spread data provided on this page
CAVEATS
- ·The regime narrative (cutting, 2.83% terminal, 79bps of cuts) directly contradicts the meeting-path probabilities and cum_cuts, so at least one field is stale or miscomputed.
- ·The far-out Dec 9 '27 cut75 node appears anomalous and materially distorts the summary stats (terminal_rate, cum_cuts, spread_to_terminal).
- ·The strip array is truncated in the data provided, so the full curve beyond ZQX26 was not visible.
- ·Probabilities and implied rates are futures-derived market expectations, not forecasts, and can shift meeting-to-meeting.
- ·Data generated 2026-07-14; intraday moves after 14:44Z not captured.
AI-generated synthesis of this page's own data — not investment advice. Verify before acting.
EFFECTIVE FFR
3.62%
Target 3.50–3.75%
SOFR SPOT
3.60%
Basis: -2.0bp vs EFFR
TERMINAL RATE (T)
4.055%
Jul '27
EFFR → TERMINAL
+43.5bp
44bp hike priced at terminal
NEXT MEETING
82%
HOLD @ Jul 30
ACTIVE REGIME — HIKING GRADUALLY
Inflation risk: market pricing moderate rate hikes above current EFFR
Market pricing 1.7 hike(s) (44bps) from EFFR. Terminal 4.05% vs today 3.62%. Inflation risk is being re-priced into the forward curve. The market believes the current rate may not be sufficiently restrictive over the next 12–18 months.
IMPLIED POST-MEETING RATE PATH
Day-weighted post-FOMC implied rate · orange dashed = current EFFR
MEETING PROBABILITY TABLE
| MEETING | POST-MTG | HOLD | CUT 25 | CUT 50 | HIKE 25 | CUM |
|---|---|---|---|---|---|---|
| Jul 30 | 3.665% | 82% | — | — | 18% | 5bp hike |
| Sep 17 | 3.794% | 31% | — | — | 69% | 17bp hike |
| Oct 29 | 3.845% | 10% | — | — | 90% | 23bp hike |
| Dec 10 | 3.937% | — | — | — | 73% | 32bp hike |
| Jan 28 '27 | 3.980% | — | — | — | 56% | 36bp hike |
| Mar 18 '27 | 4.040% | — | — | — | 32% | 42bp hike |
| May 6 '27 | 4.058% | — | — | — | 25% | 44bp hike |
| Jun 17 '27 | 4.052% | — | — | — | 27% | 43bp hike |
| Jul 29 '27 | 4.050% | — | — | — | 28% | 43bp hike |
| Sep 17 '27 | 4.007% | — | — | — | 45% | 39bp hike |
| Oct 28 '27 | 3.995% | — | — | — | 50% | 38bp hike |
| Dec 9 '27 | 2.829% | — | — | — | — | 79bp cut |
SIGNAL — HIKING GRADUALLY
Inflation risk: market pricing moderate rate hikes above current EFFR
- ›The ZQ strip shows the market pricing rates above today's EFFR over the next 12–18 months. The cutting cycle is done — the question is how many hikes come next.
- ›This typically emerges when inflation fails to return cleanly to 2% after an easing cycle, forcing the market to re-price residual inflation risk into the forward curve.
- ›Do not add duration aggressively here. Hold existing long-duration positions but do not extend. T-bills and short-end paper outperform in a hiking repricing.
- ›Watch the 5Y5Y Forward on the Inflation Curve page: if it remains stable while the short-end hikes, the hikes are seen as corrective. If 5Y5Y starts rising, the long-run anchor is slipping.
- ›The key watch: does the next CPI print come in above expectations? A hot CPI print accelerates the hiking path and the strip will reprice violently.
HOW TO READ THIS TOOL
Terminal Rate (T)
The first local peak (hiking cycle) or trough (cutting cycle) on the ZQ strip relative to today's EFFR. This is where the market expects the Fed to stop — not where they'll end up, but where they're priced to. The spread from EFFR to Terminal in basis points is the total policy adjustment the market is pricing.
Post-Meeting Rate
Each ZQ contract settles to the arithmetic average daily EFFR for its calendar month. If the FOMC meets on day D of an N-day month, the contract embeds a blend of the pre-meeting rate (days 1 through D-1) and the post-meeting rate (days D through N). Day-weighting recovers the implied post-meeting rate — the key signal.
Probabilities
FedWatch methodology: divide the post-meeting rate by 25bp grid points. The fractional part splits probability mass between the two nearest 25bp outcomes. E.g., a rate of 3.71% with EFFR 3.64% implies +7bp from today: floor(-0.28 cuts) = -1 hike, frac = 0.72 → 72% Hold, 28% Hike25. Exactly what CME FedWatch publishes.
CB LVL Toggle
Enabling CB LVL overlays horizontal rails at every 25bp policy increment around the current EFFR. The settlement rail (closest to EFFR) is brighter; surrounding rails are faint dashed lines. This lets you read the meeting-path chart in policy increments rather than raw percentages — instantly visible whether each meeting is priced to hold, cut once, cut twice, or hike.
METHODOLOGY
EFFR — FRED: DFF (Effective Federal Funds Rate, daily). Target range from FRED: DFEDTARL / DFEDTARU.
SOFR — FRED: SOFR (Secured Overnight Financing Rate, daily). Basis = SOFR − EFFR in basis points.
ZQ Strip — yfinance: CME CBOT 30-day Fed Funds futures (ZQM26.CBT format). If unavailable, falls back to FRED T3MFF / T6MFF / T1YFF Treasury spread approximation.
FOMC dates — hardcoded from federalreserve.gov. Refresh annually. Current schedule runs through December 2027.
Math: implied_rate = 100 − settlement · post = (N·rate − (D−1)·prev) / (N−D+1) · raw_cuts = (EFFR − post) / 0.25. Probabilities via fractional interpolation between 25bp grid points. Refresh: python stir_monitor.py