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Fed Rate Path Adds 25bps For Dec'23 Since Friday's Close

STIR FUTURES
  • Fed Funds implied rates have seen a steady shift higher over the past hour after initially limited to reaction from St Louis Fed’s Bullard (non-voter) telling the FT he supports lifting rates further as an insurance policy against inflation.
  • The path moves back near highs seen after Dallas Fed’s Logan’s (’23) earlier hawkish remarks that current data don’t justify a pause, compared to just two days ago noting that when conditions are uncertain we may need to travel more slowly, partly tempered by more balance comments from current voter and Vice Chair nominee Jefferson.
  • Cumulative change from effective 5.08%: +8.5bp Jun (+3.5bp on the day), +7bp Jul (+7bp), -4.5bp Sep (+7.5bp), -23bp Nov (+9bp), -44bp Dec (+10bp) and -65bp Jan (+10.5bp).
  • The June implied rate of 5.165% has increased 7bps since Friday’s close with the year-end rate of 4.64% some 25bps higher.

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