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Fed Rate Path Sees Delayed Lift Post-U.Mich

STIR FUTURES
  • With a lag, the strength of U.Mich long-term inflation expectations is starting to more clearly win out over the softer demand implications from the surprisingly large decline in consumer sentiment.
  • Starting to see a reasonable trimming of cuts later in the year, with the 94bp of cuts to Jan from 100bp pre-U.Mich.
  • Cumulative changes from current effective: 1bp Jun (+1.5bp on the day), -8bp Jul (+4bp), -24bp Sep (+5.5bp), -46bp Nov (+7.5bp), -70bp Dec (+8.5bp) and -94bp Jan (+9.5bp).

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