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Fed Implied Rates Reverse U.Mich Pop On Softer China GDP

STIR
  • Fed Funds implied rates are only marginally lower for the next couple meetings but with increasingly large declines further out, mirroring the belly led rally in Treasuries on softer than expected China GDP growth. The move helps reverse most of Friday’s push higher on the strong U.Mich survey.
  • Cumulative change from 5.08% effective: +22.5bp Jul 26 (unch), +26bp Sep (-1bp), +31bp Nov (-1bp).
  • Cuts from 5.39% Nov terminal: 8bp to Dec (from 6bp), 78bp to Jun’24 (from 73bp) and 153bp to Dec’24 (from 148bp).
  • The Fed is now in media blackout. In the flip side to Jefferson’s skip narrative ahead of the June FOMC blackout, the final guiding message this time came from a hawkish Waller.

Source: Bloomberg

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