With the Fed tapering back on everyone’s lips, Bloomberg published a story citing Eurodollar futures, which could support a US Federal Reserve rate hike in 2023.
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Money market concerns that a weaker-than-expected economy could delay the tightening of Federal Reserve policies proved short-lived on Wednesday, with the Upbeat comments from Vice President Richard Clarida helping to solidify bets for an initial rate hike in early 2023.
A softer-than-anticipated report on corporate job growth from ADP earlier in the day helped fuel a rally in Eurodollar futures, which at one point showed a rise of the first quarter point around June 2023.
This was quickly unleashed after Clarida said that the “conditions necessary to raise the target range for the federal funds rate will have been met by the end of 2022.”
The President of the San Francisco Fed, Mary Daly, echoed calls for a reduction in the bond purchase program, saying officials could start reducing asset purchases later this year or early 2022, according to an interview on PBS aired after the close of business. Treasuries remained under pressure in Asia, with 10-year yields touching 1.20%.
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