February 06, 2023 11:26 GMT
Solid Further Trimming Of 2H23 Rate Cuts
- Fed Funds implied hikes have pushed higher overnight, pricing 24bp hike for March and a cumulative 41.5bp for May as two further 25bp hikes are more seriously considered.
- The terminal now sits at 5.06% in June vs 4.89-4.9 prior to payrolls or circa 5% after payrolls and then ISM services were initially digested.
- Largest changes are further out the curve with the Dec’23 effective rate now at 4.72%, from 4.4% prior to payrolls, as 2H23 cuts are trimmed to 34bps from 50bps early Friday.
FOMC-dated Fed Funds implied ratesSource: Bloomberg