January 31, 2023 11:21 GMT
Fed Rate Path Holds Yesterday’s Drift Higher Pre-ECI
- Fed funds implied hikes: 26.5bp for tomorrow’s decision, cumulative 47bp for Mar, 60bp to a terminal 4.93% in Jun before 41bp of cuts to 4.52% end-2023.
- The Q4 ECI at 0830ET is firmly in focus after recent large revisions to monthly average hourly earnings, most recently leaving them on a slowly moderating trend into December.
- The terminal is at the high end of its 4.86-4.94% range seen since that AHE miss was combined with a large miss for ISM Services on Jan 6.
FOMC-dated Fed Funds futures implied ratesSource: Bloomberg