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Fed Rate Path Drifts Lower Pre-CPI

STIR
  • Fed Funds implied rates have pulled back further overnight, with softer-than-expected UK wage data adding to momentum from yesterday’s post-auction rally.
  • Ahead of US CPI, there is back to 50/50 odds of a first cut coming in March, just shy of two cuts with the June FOMC (47bp cumulative) and 116bp cuts to end-2024 (vs ~125bp in the build up to Friday’s payrolls) – see table.
  • Re-upping the CPI Preview: https://roar-assets-auto.rbl.ms/files/58423/USCPIPrevDec2023.pdf

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