rate-cut odds zoom higher

the market is priced fully for a 100-basis-point cut in the funds rate at tomorrow's FOMC meeting, up from 52% odds on friday. in addition, the market is priced for 22% odds of 125 basis points in cuts.

for the 4/30 fomc meeting, the market is priced for 100% odds that the funds rate will be cut by a cumulative 125 basis points to 1.75%, and for 62% odds of 150 basis points in cuts.

for the 6/25 fomc meeting, the market is priced for 100% odds of 150 basis points in cuts, which is up from 46% odds on friday, and for 24% odds of a cumulative 175 basis points in cuts.

for the end of 2008, the market is priced for the funds rate to be at 1.41%, down 15.5 basis points from friday. additionally, the market sees the fund rate holding under 1.75% through the middle of 2009.