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Fed Cut Expectations Hovering at Post-CPI Levels

STIR
  • Fed Funds implied rates are unchanged since Friday’s close for Nov but otherwise marginally higher for subsequent meetings, pushing a little further off pre-CPI recent lows.
  • Cumulative hikes from 5.33% effective: +2bp Nov and +9bp to a terminal 5.42% in Dec/Jan (+1bp/+1.5bp).
  • Cuts from terminal: 27bp to Jun’24 and 78bp to Dec’24, with both keeping to similar levels post-CPI.
  • Fedspeak: Goolsbee (’23 voter) told the FT this morning that the slowdown in inflation is undeniably a trend. 2 x Harker (’23) ahead at 1030ET and 1630ET, both with text, closely following Friday’s remarks which included that higher rates are putting pressure on the US budget and a point where that pressure becomes an issue isn’t far off.

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