📝 See Fed Terminal Rate At Around 5.0%: TD Securities

See terminal rate at around 5.0%, which implies Fed Funds of 4.83%. Expect 225bps of Fed easing by end of 2024. Even if inflation declines, it remains too high for the Fed to signal that the hiking cycle is nearing to an end. It is unlikely that the Fed will stop hiking preemptively due to concerns of repeating the 1970s mistake, which unanchored inflation expectations. Recommend Mar 23/Mar25 flattener position in SOFR futures.

- TD Securities