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2H23 Fed Hike Rate Expectations Cool

STIR FUTURES
  • Fed Funds implied hikes have firmed slightly for 2022 meetings, despite initially dipping on a large French CPI miss, but see a larger decline in 2H23 (terminal unchg at 4.48% Mar'23, Dec’23 -5bps at 4.20%).
  • Despite that, end’23 rate expectations are similar to after last week’s FOMC, with the adjustment instead in terminal to mid’23 rates as the curve flattens (May -15bps) – see chart.
  • Four Fed speakers scheduled today including VC Brainard giving opening remarks on how mon pol affects financial vulnerabilities (text, no Q&A).

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