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Fed Rate Path Off Lows But Still Close To 25bp Cut For June FOMC From Current Rates

STIR
  • Fed Funds implied hikes lift off sub-10bps but are still only back to 50/50 for a 25bp hike next week, close to where it’s now seen peaking for the tightening cycle.
  • Some very large moves for subsequent meetings despite bouncing off lows: the June meeting was briefly a terminal 5.01% at 8am London but is currently 4.38% (-20bp from current rates as it pulls back from recently fully pricing a cut) and there are now more than 115bp of cuts priced to sub-3.6% by year-end.

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