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Fed Rate Path Slowly Unwinding Prior FRC-Boosted Decline

STIR FUTURES
  • Fed Funds implied rates have pushed higher in European hours to continue yesterday’s recovery after sliding Tue with a helping hand from First Republic Bank considering an asset sale.
  • 20bp hike for next week’s FOMC (+0.5bp) and cumulative 25bp hike for Jun (+1bp) which is then almost fully reversed by Sep before 19bp of cuts from current levels to 4.64% in Nov (+2bp) and a total 42bp of cuts to 4.41% Dec (+2bp).
  • GDP Q1 advance in focus today (cons 1.9%, latest Atlanta Fed GDPNow 1.1%) after recent retail sales revisions plus its clues for tomorrow’s March core PCE deflator.


Source: Bloomberg

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