Futures markets have shifted expectations for the Fed's liftoff further out in time. The July-15 Fed Funds futures contract is only pricing a 12bp Fed Funds rate increase from the current levels - not enough for a full hike.
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| Source: barchart |
In fact the mean expectation for the rate increase timing priced into the Fed Funds futures market is roughly a year from now.
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| Source: CME |
This should slow the appreciation of the US dollar, as the Fed tries to avoid getting too far ahead of other developed economies in its normalization strategy.
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