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Fed Implied Rates Consolidate Post-CPI Slide

STIR
  • Fed Funds implied rates have lifted slightly from yesterday’s lows but hold a sizeable decline seen since US CPI having quickly more than reversed the initial hawkish reaction.
  • Cumulative cuts: 19bp for March, 71bp for June and 153bp for Dec. The Dec’24 implied effective rate of 3.8% is 10bps lower since CPI and 18bps lower since last week’s payrolls – see table for broader comparison.
  • Chicago Fed’s Goolsbee (’25 voter) late yesterday still sees the economy on a “golden path” to lower inflation but needs to see more data before rate cuts.
  • Ahead, Minneapolis Fed’s Kashkari (non-voter) speaks for the first time in two months, in a fireside chat with no published text.

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