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Yet New Cycle Highs For Fed Funds Expectations

STIR FUTURES
  • Fed Funds implied hikes have broadly held around 70bps priced for the Nov FOMC today.
  • Implied rates have climbed to new cycle highs further out though, with a terminal now seen at 4.67% in May’23 (had been ~4.50% in Mar'23 prior to Wednesday’s FOMC).
  • Further out the curve, the 4.31% in Dec’23 now exceeds the 4.26% for Dec’22 for the first time.
  • Chair Powell is first to speak post-FOMC with opening remarks tomorrow, with the event moderated by VC Brainard and Governor Bowman, whilst we don’t rule out pop-up appearances before Collins, Bostic & Mester are scheduled for Monday.

Fed Funds futures implied rates at specific FOMC meetingsSource: Bloomberg

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  • Fed Funds implied hikes have broadly held around 70bps priced for the Nov FOMC today.
  • Implied rates have climbed to new cycle highs further out though, with a terminal now seen at 4.67% in May’23 (had been ~4.50% in Mar'23 prior to Wednesday’s FOMC).
  • Further out the curve, the 4.31% in Dec’23 now exceeds the 4.26% for Dec’22 for the first time.
  • Chair Powell is first to speak post-FOMC with opening remarks tomorrow, with the event moderated by VC Brainard and Governor Bowman, whilst we don’t rule out pop-up appearances before Collins, Bostic & Mester are scheduled for Monday.

Fed Funds futures implied rates at specific FOMC meetingsSource: Bloomberg