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Pausing After Powell “Prepared To Do More”

  • FOMC-dated Fed Funds implied hikes have been little changed since rising on Powell yesterday repeating that 50bp hikes over the next two meetings are appropriate, but with two-sided risk including being prepared to do more if necessary.
  • Pricing close to where it was once the dust had settled on CPI, with 53bps for Jun, 102bps for Jul, 140bps for Sep and a little below with 189bps for Dec.
  • Ahead, repeat appearances from Kashkari (’23 voter) and Mester (’22) after Mester on Tuesday similarly noted openness to larger than 50bp hikes if inflation doesn’t slow in 2H22.

Cumulative hikes implied by FOMC-dated Fed Funds futuresSource: Bloomberg

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