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Fed Rate Path Dipped Post-RBNZ + Context For Upcoming Fedspeak

STIR
  • Fed Funds implied rates have overnight reversed yesterday’s modest gain, primarily in spillover from a dovish RBNZ.
  • Cumulative cuts from 5.33% effective: 1bp Mar, 5bp May, 19bp Jun and 79bp Dec. The latter saw 76bp of cuts yesterday, with Fed swaps fleetingly nudging the 75bps from the median Dec dot.
  • Ahead, Bostic (’24 voter) and Collins (’25 voter) both appear in separate fireside chats at 1200ET and 1215ET, Collins with prepared remarks. Bostic said Feb 16 that he still expects two rate cuts this year; he could support three cuts with positive data but if the economy performs well he’s ok waiting longer to cut. Collins on Feb 7 stuck to central FOMC lines that there needs to be more evidence to consider rate cuts, with it likely being appropriate to ease "later" this year.
  • NY Fed’s Williams (voter) follows shortly after with keynote remarks including text at 1245ET. He recently said on Thu (published Fri) that he also sees rate cuts “likely later this year”, with consumer spending growth to slow this year partly on the recent spike in auto and credit card delinquencies.

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