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Fed Hikes Pushed Higher Early On Memorial Day

  • Implied Fed hikes are keeping to a 50bp hike in Jun and fractionally under that in July (cumulative 99bps) but firm further off last week’s post-May FOMC lows beyond that with 134bps for Sep and 185bp to year-end. The latter remains easily below the 190-195bps seen prior to the recent batch of weak US data – see chart.
  • The increase appears to be led by Europe, where ECB-dated OIS has increased 12bps from Fri to 113bps to year-end.
  • Memorial Day in the US sees very little on the docket although the Fed’s Waller (voter) discusses the economic outlook at an event in Frankfurt at 1100ET, including prepared remarks and Q&A from the moderator.

Cumulative hikes implied by FOMC-dated Fed Funds futuresSource: Bloomberg

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