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Fed Rate Path Unwinds Waller Boost

STIR FUTURES
  • Fed Funds implied hikes continue to cool into 2023, nearly back at Friday’s close after previously being boosted by Waller weekend comments that better CPI was just one print.
  • 51bp for Dec (+0.5bp), cumulative 85bp to 4.70% for Feb (-0.5bp), terminal 4.89% May (-2.5bp) and 4.41% for Dec’23 (-5bp). The almost 50bps of cuts priced to end-2023 is contrary to closer to 35bps prior to CPI.
  • Front-loaded Fedspeak: Harker (’23 voter, text) at 0900ET, Gov Cook at 0900ET and VC Supervision Barr (text) at 1000ET.

FOMC-dated Fed Funds implied ratesSource: Bloomberg

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