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Fed Hike Expectations Buoyed By EA CPI

STIR FUTURES
  • Fed Funds implied hikes firmed after the beat in Eurozone CPI (headline +0.6% vs 0.5% M/M, core 3.5% vs 3.2% Y/Y).
  • It sits with 51.5bps for next week, 110bp for June, 197bp for Sep (4 meetings, only exceeded 200bp last Fri) and 246bps to year-end (6 meetings).
  • It comes despite downside risk to today’s March core PCE print after yesterday’s Q1 advanced print implied nearer to +0.15% M/M (cons. 0.3%) if there are no revisions to prior months.

Cumulative hikes at specific meetings from Fed Funds futures (%pts)Source: Bloomberg

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  • Fed Funds implied hikes firmed after the beat in Eurozone CPI (headline +0.6% vs 0.5% M/M, core 3.5% vs 3.2% Y/Y).
  • It sits with 51.5bps for next week, 110bp for June, 197bp for Sep (4 meetings, only exceeded 200bp last Fri) and 246bps to year-end (6 meetings).
  • It comes despite downside risk to today’s March core PCE print after yesterday’s Q1 advanced print implied nearer to +0.15% M/M (cons. 0.3%) if there are no revisions to prior months.

Cumulative hikes at specific meetings from Fed Funds futures (%pts)Source: Bloomberg