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Fed Rate Path Back Near Post-CPI Lows On FOMC Day

  • Fed Funds implied hikes have overnight unwound most of yesterday’s bounce off post-CPI lows.
  • 51bp for today’s FOMC (unch), a cumulative 83bp to 4.66% for Feb’23 (-1bp on the day) as a 25bp stepdown is more seriously considered for the first time, terminal 4.82% in May’23 (-3.5bp) and 4.32% for Dec’23 (-4bp).
  • The 50bp of cuts from peak to end-2023 is back near recent highs.

FOMC-dated Fed Funds futures implied ratesSource: Bloomberg

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