Fed funds futures are surging because the CPI report takes the FOMC out of the image for now. Deferred contracts are pacing the transfer, although we suspect the market is getting forward of itself, transferring ahead fee cuts and pricing in a string of easings subsequent yr. The implied Might contract suggests about an 80% likelihood for 25 bp drop in charges with June greater than totally priced for a reduce. The December contract costs 100 bps in easing.

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