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75bp Fed Hikes Fully Priced For June, 287bp For Rest Of 2022

STIR

A quick check on futures-implied rates going into the FOMC decision:

  • A 75bp hike is basically exactly priced for June, with just under 100% chance of a further 75bp raise in July.
  • Also implied are further 50bp hikes in September and November, with a 25bp hike fully priced for December but about 50% chance of 50bp. That's a total of 287bp in hikes from here to a rate just under 3.7% (vs about 0.82% currently).
  • Terminal Fed funds seen just under 4% by mid-2023, with about 50bp of cuts by early 2024.

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