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Another Day, A Further Trimming Of Rate Cuts

  • Fed Funds implied hikes are unchanged for immediate meetings but push higher further out with 2H23 cuts now at 27bps vs 50bps prior to payrolls.
  • 26bp for Mar, cumulative 45bp for May, 58bps to a terminal 5.16% in Jul (+2bp) before cutting to 4.89% in Dec (+4bp). The Dec rate pushes more earnestly above the Mar rate for the first time this cycle.
  • Gov. Waller (voter) and later Harker (’23 voter) both speak with text but at a crypto conference. Harker for the first time post-FOMC/payrolls. Waller two days ago “farther to go… might be a long fight, with interest rates higher for longer than some are currently expecting”.

FOMC-dated Fed Funds futures implied rates at specific meetingsSource: Bloomberg

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