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Fed Rate Path Pushing Higher Pre-CPI

STIR FUTURES
  • Fed Funds implied rates are little changed for the May 3 FOMC (18bp hike) but have pushed higher further out.
  • The peak spills over into June with 21bp of hikes to 5.04% (+2bp), with 22bp of cuts from current levels to 4.61% Nov (+5bp) and 40bp of cuts to 4.43% Dec (+5bp).
  • ’24 voters Barkin and Daly speak today ahead of the FOMC minutes. ’23 voters from late yesterday: Harker repeats getting rates above 5% and holding whilst watching data to see if more action needed on inflation, banking strains seem to have calmed down; Kashkari hopeful signs calm is being restored in the bank sector and less optimistic than bond market on inflation outlook.


FOMC-dated Fed Funds implied ratesSource: Bloomberg

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