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Fed Rate Path Continues Post-Bullard Push Higher

  • Fed Funds implied hikes continued to push higher overnight after being driven later yesterday by Bullard (non-voter) saying he wouldn’t rule out supporting a 50bp hike in March having advocated.
  • It has fully priced 2x25bp hikes over the next two meetings whilst also sees new cycle highs for both terminal and end-2023 rates.
  • 28bp for Mar (+0.5bp), cumulative 52.5bp for May (+3.5bp), 73bps to a terminal 5.32% in July (+5.5bp) before 19bp of cuts to 5.13% Dec (+7bp).
  • Barkin (’24 voter) and Gov Bowman (voter) ahead having both already spoken this week and neither with text. Barkin specifically on the labor market before Gov Bowman speaks at a credit conference which could limit mon pol discussions again.

Source: Bloomberg

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