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Fed Hike Expectations Firm Despite GDP/PCE Miss

STIR FUTURES
  • Broadly mirroring the rise in long-term inflation breakevens, hikes implied by Fed Funds futures sit ~2bps higher with a cumulative 108bps for June, 154bps for July and 240bps to year-end.
  • This comes despite a miss in core PCE Q/Q inflation in the Q1 GDP release, implying downside risk to tomorrow’s March core PCE print at closer to +0.15% M/M (cons. 0.3%) if there are no revisions to prior months.


Source: Bloomberg

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