February 06, 2023 19:32 GMT
Another Sizeable Trimming Of 2H23 Rate Cuts
- Fed Funds implied hikes have cooled from intraday highs but have still seen a significant further pushing higher after Friday’s payrolls/ISM boost despite few new drivers.
- 24.5bp priced for Mar 22 (+1.5bp on the day) and a second 25bp hike in May is increasingly eyed (cumulative 43bp, +3.5bp).
- Larger moves further out with the terminal now seen straddling June/July meetings with a cumulative 52bps of hikes to 5.10/5.11% (+8/10bp).
- The Dec’23 rate jumps to 4.78% (+15.5bp) as 2H23 rate cuts are trimmed to 33bps from 50bps pre-payrolls and 40bps with yesterday’s close.