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Fed Terminal Just Under 5%

STIR FUTURES
  • Fed Funds implied hikes have reversed some of the gyrations of last week’s thin holiday trade to sit little changed/slightly below the post-FOMC minutes close.
  • 53.5bp for Dec, 91bp to 4.75% for Feb’23, terminal 4.99% Jun’23 and 4.61% Dec’23.
  • Fedspeak bunched at 1200ET: NY Fed’s Williams with text and full Q&A plus a Bullard interview. Williams most recently said financial risks shouldn’t shape Fed rate decisions whilst Bullard saw a terminal at a minimum 5-5.25% whilst citing Taylor Rules showing 5-7%.

FOMC-dated Fed Funds implied ratesSource: Bloomberg

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