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Fed Rate Path Consolidates CPI Moves Ahead Of FOMC

STIR
  • Fed Funds implied rates have consolidated yesterday’s post-CPI move, with a hit to pricing for today’s decision and July’s meeting before decent increases later in the year and into January, with just 15bp of cuts from the Sept terminal to year-end.
  • Recent intraday 2-3bp increases for year-end pricing only unwinds a drop through Asia hours.
  • Cumulative changes from 5.08% effective: just +2.5bp for today (unch on the day), +17.5bp Jul (unch), +20bp Sep (unch), +14bp Nov (unch), +4.5bp Dec (+0.5bp), -8bp Jan (-0.5bp).

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