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U.S. Futures Reverse Pre-Jun FOMC Implied Tightening For The Year

STIR

As we head into PMI data, U.S. rate futures have just about priced out the additional 2022 hiking seen after the pre-FOMC media revelations on Jun 13 that the June hike would be 75bp.

  • End-2022 implied Fed funds rate is now 3.40%, so about 175bp in hikes from here, but that's off from a peak of over 3.70% at the time of the Jun 15 FOMC decision.
  • A 75bp hike is still close to fully priced in for July, but the pace is seen downshifting to 50bp in September, with a further 50bp total for Nov and Dec.
  • Note that 3.40% is basically exactly in line with the FOMC's Dot Plot median for 2022.

Source: BBG

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As we head into PMI data, U.S. rate futures have just about priced out the additional 2022 hiking seen after the pre-FOMC media revelations on Jun 13 that the June hike would be 75bp.

  • End-2022 implied Fed funds rate is now 3.40%, so about 175bp in hikes from here, but that's off from a peak of over 3.70% at the time of the Jun 15 FOMC decision.
  • A 75bp hike is still close to fully priced in for July, but the pace is seen downshifting to 50bp in September, with a further 50bp total for Nov and Dec.
  • Note that 3.40% is basically exactly in line with the FOMC's Dot Plot median for 2022.

Source: BBG