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Fed Cut Expectations At Low End Of Recent Ranges

STIR
  • Fed Funds implied rates have firmed marginally since Friday’s close, with a still familiar +2.5bp for Sep (unch) and cumulative +9.5bp for Nov (+0.5bp) to a terminal 5.43%.
  • Sightly larger increases in 2024 implied rates sees cut expectations remain at the low end of recent ranges with 47bp from terminal to Jun’24 and 113bp from terminal to Dec’24.
  • A quiet docket to start the week sees attention on external factors including China policymaking (1y LPR cut 10bp & 5Y LPR steady vs 15bp cut expected for both) today before domestic data and especially Jackson Hole later this week comes into focus.

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