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Just 25bp Of Fed Cuts From Terminal To Year-End

  • Fed Funds implied rates hold slightly lower for next week’s FOMC decision after relatively little change but otherwise have drifted higher still and only imply 25bp of cuts from the July terminal to year-end vs almost 40bps at Thursday’s close before Friday's mixed payrolls report.
  • Odds of a June hike hold that 1/3 to 1/4 range seen since Jefferson’s skip rhetoric, whilst a July hike is still not quite fully priced.
  • Cumulative changes from 5.08% effective: +7bp Jun (-0.5bp), +21bp Jul (unch), +19bp Sep (+2bp), +9bp Nov (+3.5bp), -5bp Dec (+3.5bp) and -22bp Jan (+4.5bp).
  • Mester (’24 voter) gives brief welcome remarks at 1330ET but being within the blackout period shouldn’t touch on mon pol.

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