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Modest Trimming Of Fed Cuts On FOMC Statement

STIR
  • No new forward guidance on rates in the FOMC statement helps lift Fed Funds implied rates by 1.5-2bp for meetings out to January.
  • September in particular lifts 1.5bp but that means a cut is still slightly more than fully priced at 26.5bp.
  • There are a cumulative 67bp of cuts for year-end as three cuts are still seen a little more likely than two.
  • Cumulative cuts from 5.33% effective: 27bp Sep, 42bp Nov, 67bp Dec and 85bp Jan.

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