IMF On Debt Cap Talks, Higher For Longer Rates

• IMF headlines from Georgieva push back on the drawn out nature of debt talks and see a need for higher for longer interest rates with inflation above target throughout 2024.

Bloomberg headlines:

*IMF: US DEBT-CAP BRINKMANSHIP CREATES AVOIDABLE SYSTEMIC RISK

*IMF: CONGRESS SHOULD IMMEDIATELY RAISE OR SUSPEND US DEBT CAP

*IMF SAYS US NEEDS TO DO MORE TO LOWER PUBLIC DEBT

*IMF SEES FED FUNDS RATE AT 5.25% TO 5.5% UNTIL LATE 2024

*IMF SEES US INFLATION RATE ABOVE FED'S 2% TARGET THROUGHOUT '24

• OIS pricing currently shows a terminal effective 5.33% for the July meeting (i.e. exactly 5.25-5.5% range assuming similar mechanisms in place for the effective 8bps above the lower rate), but it then dips to 4.82% with the January meeting.