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Year-End Fed Rate back At Pre-FRC Rescue Talk Levels

STIR FUTURES
  • Fed Funds implied hikes, already shifting lower through the session, have seen a sharper fall since headlines that some banks were curbing trades with CS, along with potential positioning ahead of the weekend and any further bank developments.
  • Back to 15bp for next week’s FOMC (-4bp on the day) before a cumulative 20bp for May (-15bp) before 91bps of cuts to 3.87% by year-end (-32bp).
  • The latter takes a year-end implied rate back to yesterday levels before it first jumped on headlines that major US banks were coordinating a rescue of First Republic with the subsequent $30B of deposits.


FOMC-dated Fed Funds implied ratesSource: Bloomberg

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