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Fed Hikes Trimmed In 2H2022

STIR FUTURES
  • FOMC-dated Fed Funds futures pricing 48.5bps for May and 93bps for June. Hikes through to year-end have fallen further since the initial snap lower after CPI yesterday, currently at 205bps.
  • Fed Governor Waller is tentatively scheduled to speak with CNBC shortly (approx 1525ET).
  • He said on Apr 11 that the Fed is doing all it can to avoid "collateral damage" from raising interest rates, being a "blunt-force tool" that can act as a "hammer" on the economy.
  • His comments before that on Mar 24 regarding QT were with hindsight in line with what FOMC members generally agreed at the Mar 15-16 meeting (MBS sales could be considered after balance sheet runoff was well under way, with the aim of the SOMA portfolio primarily made up of Tsys).

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