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Fed Rates Continue Rate Cut Patience Theme

STIR
  • Fed Funds implied rates have pushed up to 2bps higher overnight, continuing a theme of greater patience over the starting point of rate cuts.
  • Cumulative cuts: 5bp Mar, 18.5bp May, 40bp Jun and 115bp Dec. The 4.18% implied effective rate for Dec’24 is broadly back to levels before the Dec FOMC perceived pivot.
  • Ahead, CPI revisions headline today’s docket before Dallas Fed’s Logan (non-voter) speaks in Q&A at 1330ET.
  • One of the more hawkish FOMC members, Logan last spoke Jan 6 noting a lot of the effects of higher rates are behind us and inflation risks a pickup if financial conditions loosen, but also that the Fed should begin the discussion on slowing its asset runoff.

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