The interest rate path has been locked in: the real risk in the market is not in the rate hike, but in the “no change” scenario. The current market expectations for the Beautiful Country/ Fed have already become extremely consistent: the latest probability structure for the April meeting—Probability of a 25bp rate hike: 1.6%; Probability of no change: 98.4%. Through the cumulative path to June—Probability of a 25bp rate cut: 0% (fully priced out); Probability of no change: 98.2%; Probability of a 25bp rate hike: 1.8%.

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