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Fed Rates On Balance Lower Ahead Of CPI, Heavy Fed Comms

STIR
  • Fed Funds implied rates hold slightly lower on the day despite lifting in recent hours, the exception being pricing for the July 26 decision which remains steady at 5.30% for currently +23bp ahead of CPI.
  • Cumulative hikes from 5.07% effective (dropped back 1bp on Mon): +23bp Jul (unch), +29bp Sep (-1bp), +35.5bp Nov (-0.5bp), +31bp Dec (-1bp).
  • Cuts from Nov terminal: 4.5bp Dec’23, 62bp Jun’24, 136bp Dec’24.
  • Heavy Fed commentary today: Barkin (’24) speaks on inflation just as CPI hits at 0830ET, Kashkari on mon pol (’23) at 0945ET, Bostic at 1300ET (’24) and Mester (’24) at 1600ET – only Mester with text. Kashkari is likely the pick of those, having last heard on May 23 (may need rates higher if inflation stays high).
  • There is also the Beige Book plus the Senate Banking Committee hearings on Fed Board nominations.

Source: Bloomberg

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