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Fed Terminal Rate Pricing Waiting On New Drivers

STIR FUTURES
  • Minimal change in Fed Funds implied hikes overnight: 57.5bp for Dec, 99bp for Jan to 4.84%, a terminal 5.13% for Jun and 4.85% for Dec’23, with an eye firmly on CPI inflation on Thu and perhaps less so today's midterms.
  • Next scheduled Fedspeak tomorrow with NY Fed’s Williams.
  • Barkin (’24) from late yesterday:
    • “We have the tools to bring inflation down, no matter what disruptions occur”
    • “Inflation should come down but don’t expect its drop to be immediate or predictable”
    • "[Business leaders] still view their increased pricing power as temporary. They see it as an episode, not a regime change”



FOMC-dated Fed Funds implied ratesSource: Bloomberg

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