Expect Fed to Raise Terminal Policy Rate to 5% and Perhaps Even More

Markets US CPI eased more than expected in November to 7.1% headline and 6% core inflation. The downside surprise was no more than 2 and 1 hundreds of a percent respectively but it mattered for markets. US short term yields dropped almost 25 bps intraday (2y), outperforming the long end (<20 bps in the 10y). […]

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