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Range Bound Ahead of Payrolls

STIR FUTURES
  • Fed Funds implied hikes for Sept sit at 60.5bps, the middle of the wide post-July FOMC range of 55-65bps.
  • Beyond Sept, hikes sit towards the higher end of the range with a cumulative 108bps priced to year-end or 113bps to a current peak seen in Feb'23 at 3.46% before 50bp of cuts to Dec'23, having seen only a small boost after Mester ('22) said she sees rates peaking a little over 4% next year.
  • Prior to payrolls, Barkin ('24) speaks to the Lexington Chamber of Commerce with Q&A at 0800ET. Remarks from two days ago included recession fears look inconsistent given jobs growth but a recession could happen, whilst expecting inflation to not ease immediately or predictably.

FOMC-dated Fed Funds implied rate at specific meetings plus Dec22-23 curve (green)Source: Bloomberg

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