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Fed Hikes Boosted With Risk-On, Powell Later

STIR FUTURES
  • Fed Funds implied hikes have increased back to recent highs barring the snap reaction to the CPI beat, amidst broad risk-on helped by rescinding Chinese covid concerns and along with a firming of ECB hike pricing more lately.
  • Currently pricing 54bp for June, 104bp for July, 143bp for Sep and 193bp to year-end.
  • Powell’s WSJ interview at 1400ET (no text) headlines a heavy schedule of six speakers, three of whom vote this year.
  • It follows last week’s Marketplace interview on consideration of larger than 50bp hikes: “I would just say, we have a series of expectations about the economy. If things come in better than we expect, then we’re prepared to do less [compared to 50bp hikes at next two meetings deemed appropriate]. If they come in worse than when we expect, then we’re prepared to do more.”

Source: Bloomberg

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  • Fed Funds implied hikes have increased back to recent highs barring the snap reaction to the CPI beat, amidst broad risk-on helped by rescinding Chinese covid concerns and along with a firming of ECB hike pricing more lately.
  • Currently pricing 54bp for June, 104bp for July, 143bp for Sep and 193bp to year-end.
  • Powell’s WSJ interview at 1400ET (no text) headlines a heavy schedule of six speakers, three of whom vote this year.
  • It follows last week’s Marketplace interview on consideration of larger than 50bp hikes: “I would just say, we have a series of expectations about the economy. If things come in better than we expect, then we’re prepared to do less [compared to 50bp hikes at next two meetings deemed appropriate]. If they come in worse than when we expect, then we’re prepared to do more.”

Source: Bloomberg