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Fed Terminal Still Hovering Around 5% With Powell Eyed

  • Fed Funds implied hikes are little changed overnight, with minimal spillover from Eurozone CPI inflation as headline missed but core was in line.
  • 54bp for Dec (unch), cumulative 91.5bp to 4.75% for Feb’23 (-0.5bp), terminal 5.01% Jun’23 (+0.5bp) and 4.64% Dec’23 (unch). The terminal has hovered either side of 5% even since last week’s collection of weaker data and FOMC minutes.
  • Solid data line-up before Powell headlines with a discussion on the economy and labor market (1330ET, text and Q&A). He’s preceded by Governors Bowman (0850ET) and Cook (1235ET, text) before the Beige Book (1400ET).

FOMC-dated Fed Funds implied ratesSource: Bloomberg

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