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Fed Rate Path Off Lows But Still Nearly 100bps Of Cuts To Year-End

STIR FUTURES
  • Fed Funds implied rates have pushed off earlier lows to show a mere 3bps of hikes for the May FOMC from an effective 4.83%.
  • A cut in June is seen closer to 50/50 again (-14bps) before 40bps of cuts for July and 95bps to 3.88% year-end.
  • Some mixed post-FOMC Fedspeak so far. Bullard (non-voter) reveals he was joint second highest dot at 5.6 (which still leaves one 5.9 dot) and puts 80% probability of financial stress abating, Barkin (’24 voter) saw a pretty clear case for a hike with stresses not sufficient to pull back to learn more and Bostic (’24 voter) noted a lot of debate behind decision to hike 25bp.

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