That implied 'terminal' rate is lower than Fed officials' new year-end median projection of 5.60%.
When set against the implied 2023 year-end SOFR rate of 5.20%, traders are pricing in almost 150 bps of rate cuts next year.
Analysts at TD Securities reckon the Fed is done raising rates and will begin easing in December this year.
This is the first time in more than a year no rate cuts have been priced into the 2023 SOFR futures curve.
Just over a month ago, the curve implied around 100 bps of rate cuts in the second half of this year.
Persons:
they're, Societe Generale's Stephen Gallagher, Jerome Powell's, Powell, Jamie McGeever, Paul Simao
Organizations:
Federal, Fed, Traders, Reuters, Securities, Societe, Thomson
Locations:
ORLANDO, Florida