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Fed Rate Path Consolidates 5% Terminal

STIR FUTURES
  • Fed Funds implied hikes have consolidated yesterday’s rise, spurred on by the beat for ISM services which helped continue a post-payrolls bounce.
  • 51bp for Dec, a cumulative 90bp to 4.74% for Feb’23 (4.68% pre-payrolls), a terminal 5.0% for May’23 and 4.56% for Dec’23.
  • The terminal has lifted off a pre-payrolls low of 4.84% but remains below the pre-Powell high of 5.06%.

FOMC-dated Fed Funds implied ratesSource: Bloomberg

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