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Post-Bullard Climb In Fed Terminal Rate Holds

STIR FUTURES
  • Bullard (’22) looking for a minimum 5-5.25% has helped spark a sizeable increase in the Fed Funds rate path today.
  • FOMC-dated Fed Funds futures show a terminal of 5.0% now straddling May-Jun meetings (+8.5bps on the day) with a Dec’23 rate of 4.56% (+14bps).
  • Putting into perspective, this terminal rate remains 8bps lower than after the Nov FOMC (and 15bp below highs the day after), whilst the Dec’23 rate is almost 25bps lower - see chart.
  • Kashkari ('23) currently ongoing before Powell later at 2005ET is expected to steer clear of mon pol in a toast to Evans, leaving Collins (’22) scheduled to round out the week tomorrow on the labour market (including text).

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  • Bullard (’22) looking for a minimum 5-5.25% has helped spark a sizeable increase in the Fed Funds rate path today.
  • FOMC-dated Fed Funds futures show a terminal of 5.0% now straddling May-Jun meetings (+8.5bps on the day) with a Dec’23 rate of 4.56% (+14bps).
  • Putting into perspective, this terminal rate remains 8bps lower than after the Nov FOMC (and 15bp below highs the day after), whilst the Dec’23 rate is almost 25bps lower - see chart.
  • Kashkari ('23) currently ongoing before Powell later at 2005ET is expected to steer clear of mon pol in a toast to Evans, leaving Collins (’22) scheduled to round out the week tomorrow on the labour market (including text).