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Fed Hike Expectations Waiting On Powell

STIR FUTURES
  • FOMC-dated Fed Funds implied hikes are back roughly where they ended yesterday, with 70bps priced for July (middle of post-FOMC range) before a cumulative 126bp for Sep and 187bp for Dec (lower end of range).
  • Mester (’22 voter) speaking to CNBC earlier currently advocates a 75bp hike in July whilst seeing debate between 50bp and 75bps, whilst prepared remarks for a panel discussion at 1130ET note that long-run inflation expectations are rising and warns against complacency.
  • Fedspeak focus today is on Powell’s panel discussion at the ECB forum in Sintra (0900ET). One of the more interesting data developments since Powell last spoke at testimonies last week, noting unconditional commitment to fighting inflation, was Friday’s downward revision in the U.Mich long-term inflation expectations figure from the “eye-catching” 3.3% preliminary to 3.1% final.

Source: Bloomberg

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