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Stickier Expectations For Near-Term FOMC Meetings, 2H23 Climbs Further

STIR FUTURES
  • The latest push higher in front end Treasury yields (2Y now +20bps) comes with large increases in rate expectations for 2H23 with a year-end rate now seen at 4.27% for +22bp on the day.
  • Stickier expectations for near-term meetings though: 20bp for tomorrow’s FOMC decision and a cumulative 36bps to a peak 4.94% in May (+3.5bps since the start of the US session).
  • The combination trims implied 2023 cuts to 64bps from 85bp at yesterday’s close, at what would be the lowest close since Mar 10.

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