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Small Shift In Fed Funds Futures, Fedspeak Later

  • Fed Funds futures implied hikes have shifted slightly since London came in, with 1 extra bp of tightening seen in March (+33bps) but 1bp less in June (79bps) and Dec (133bps).
  • Similarly, the odds of four consecutive hikes for Mar, May, Jun and Jul have dipped a little further with 93bps priced for July, down from yesterday’s late high of 96bps.
  • Ahead of today’s Fedspeak: Mester (1200ET) last spoke before the Jan FOMC blackout, repeating her support for a March hike (if the economy in March looks like it did on Jan 11) and saying the Fed should shrink the balance sheet as fast as it can without disrupting financial markets. Bowman (1030ET) last spoke in Nov.

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