January 31, 2023 20:11 GMT
Fed Terminal Back In Middle Of Months’ Range After ECI
- Fed Funds implied hikes have unwound yesterday’s climb, easing firstly on the softer than expected ECI before further downward pressure from misses for the MNI Chicago PMI and Conference Board consumer survey (albeit the latter with conflicting details such as stronger labour market perceptions).
- Ahead of tomorrow’s FOMC decision, it keeps 26bps priced (-0.5bp on the day) before a cumulative 46bp for March (-0.5bp) and 58bp to a terminal 4.91% in Jun (-1.5bp) as the latter falls back nearer the middle of its 4.86-4.94% range seen since payrolls/ISM services on Jan 6.
- That’s followed by 44bp of cuts to 4.47% (-3bp) by year-end.