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Fed Rate Path Builds Near Term, Trimmed Into 2H23

STIR FUTURES
  • Near-term Fed Funds implied rates are holding higher on the day with a 23bp hike for next week (+0.5bp) and a cumulative 30bp for Jun (+1.5bp).
  • Beyond that, implied rates are off lows that followed in the hour after softer retail sale revisions and Dallas Fed manufacturing release but still dip on the day, with 8bp of cuts from current levels for Nov (-1.5bp) and 28bp of cuts from current to 4.55% for Dec (-2.5bp).
  • A near-term potential driver at the margin from First Republic’s Q1 earnings after the close, whilst tomorrow’s docket sees second tier data with a data focus more firmly on GDP and PCE coming Thu/Fri.

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