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Fed Rate Path Nudges Higher With Powell Eyed

STIR
  • Fed Funds implied rates have pushed a little higher after maintaining yesterday’s modest climb, with now 5bp of tightening over the next two meetings.
  • The first cut from current levels is still just about seen with the June meeting (cumulative 25bps) and with 85bps of cuts to Dec’24 again from current levels.
  • Chair Powell clearly headlines today’s continued Fedspeak after yesterday’s ultimately limited musings. Vice Chair Jefferson noted the Fed may need to respond if inflation expectations rise and Harker (’23 voter) maintained his preference to hold rates steady as the inflation fight goes on. Goolsbee (’23) meanwhile earlier today said the Fed must monitor risks of overshooting rates.

Today’s schedule:

  • 0930 Bostic (’24) and Barkin (’24 voter) discuss survey data (just Q&A)
  • 1100 MNI Webcast with Barkin (’24) (incl text)
  • 1200 StL Fed interim Pres Paese on policy, economy outlook (the role next votes in 2025 and interim)
  • 1400 Powell at IMF Conference panel discussion (text expected but not confirmed)

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