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Fed Terminal Pulled Forward Into May

STIR FUTURES
  • The Fed Funds implied terminal has nudged higher in European hours after continuing yesterday’s post-data decline into the Asia session, helped by ECB’s Knot saying it plans to hike by 50bps multiple times.
  • The terminal remains relatively depressed by recent standards though, close to pre-Dec FOMC brief lows.
  • 27bp for Feb 1 (unch), cumulative 45bp for Mar (+0.5bp), 54bp to a terminal 4.87% now seen in May not June (+0.5bp) and then 53bp of cuts to 4.34% in Dec (-1bp).
  • Fedspeak: Three appearances with text from non-voter Collins plus permanent voters VC Brainard and then late on Williams. Last heard from Brainard Nov 28.


Source: Bloomberg

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