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Fed Rates Just Shy Of One Further Hike Come November

STIR
  • Fed Funds implied rates have cooled slightly since Friday’s close, with the dip coming ahead of the weak German Ifo which has helped reinforce the move.
  • As started to be the case last week, the implied terminal is seen in the Nov meeting with just shy of a full further hike (cumulative +23.5bps at 5.315%). It’s followed by 9bp of cuts in Dec whilst January’s effective 5.09% only takes it back near current levels after the FOMC’s mid-June pause/skip.
  • Cumulative changes from 5.08% effective: +17bp Jul (-0.5bp on the day), +20bp Sep (-1bp), +23.5bp Nov (-1bp), +14bp Dec (-2bp) and +1bp Jan (-2.5bp).
  • No Fedspeak scheduled today with attention on Powell’s panel appearance at the ECB’s Sintra Forum on Wed.

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