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Fed Rates See Modest Lift With Notably Mixed U.Mich Report

STIR
  • Fed Funds implied rates have unwound an earlier decline although reaction to the further step higher in U.Mich inflation expectations is likely limited by the notable slip in consumer sentiment and Powell’s prior commentary concerning it being a preliminary report, as above.
  • It leaves cumulative hiking of 5.5bp over the next two meetings (+1bp on U.Mich) and 83bp of cuts from that January peak to end-2024 (vs 85bp pre-data).

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