The Meaning of Measured: A Market View

In Friday's post-employment-report post, I linked to a Business Week article that included the following take:

February's employment report... was robust enough to warrant optimism on the economy, but no so strong as to significantly alter the Federal Reserve's "measured" policy path.

Here's how that translated into the bets being placed on options for federal funds futures.  For the forthcoming meeting, expectations of another 25 basis points have seemed generally impervious to incoming news.



Not so for the May 3 meeting.  It appears that some support for a more aggressive posture had been building since Mr. Greenspan's Congressional testimony.  The productivity report and the employment report put the kibosh on that movement.



That change translates into a lower expected level of the funds rate in July as well.



All together, though, these crystal balls reveal no pause through mid-summer.