Market Roundup: Fed Speak Buoys Short End

Tsy futures mixed now, well off post-data lows: yield curves steeper now (2s10s +4.178 at -53.354 vs. -61.953 low) as short end outperforms on heels of recent dovish-toned comments from Fed speakers: Boston Fed Collins and Richmond Fed Barkin.

• “With rates now in restrictive territory, I believe it is time to shift focus from how rapidly to raise rates, or the pace, to how high – in other words, to determining what is sufficiently restrictive,” Collins said. “Down the road, when we get there, in my view we’ll need to shift again to focus on how long to hold rates at that level.”
• Barkin headlines from CNBC: "UNSURE OF DECEMBER FOMC MOVE, MORE DATA STILL COMING .. CAN CREDIBLY SAY FED HAS `FOOT ON THE BRAKE'".
  
• STIR update: Terminal Funds rate climbing to 5.12% vs. 5.18% earlier. With Fed funds effective 3.83%
  • Dec 2022: 58bp cumulative hikes to 4.41% (59.5bp to 4.42% earlier)
  • Feb 2023: 99bp cumulative hikes to 4.82% (101bp to 4.84% earlier)
  • Mar 2023: 118bp cumulative hikes to 5.01% (121bp to 5.04% earlier)
  • May 2023: 127bp cumulative hikes to 5.10% (131bp to 5.13% earlier)
  • Peak Fed funds at June 2023 -July 2023 (5.155%)