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Fed Seen Locked In For 2x50bp Ahead Of CPI

STIR FUTURES
  • Hikes implied by Fed Funds currently locked in to the growing FOMC consensus for 50bp hikes at the next couple meetings.
  • 52.5bps for June, 101bps for July, 138bp for Sep and 185bp for Dec (five meetings).
  • CPI at 0830ET. Preview: https://marketnews.com/mni-us-cpi-preview-strong-core-on-smaller-autos-drag
  • Fedspeak: Only Bostic (’24 voter) scheduled for 1200ET. He yesterday talked of hikes being purposeful and intentional but with potential to do less if the supply-demand gap shrinks, in contrast to Mester (’22) being open to larger hikes if inflation doesn’t slow in 2H22.


Cumulative hikes implied by FOMC-dated Fed Funds futures since the FOMC Source: Bloomberg

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