The federal funds rate is now expected to remain higher for a longer period into 2023 as no rate cuts are expected

• The federal funds rate now implies no rate cuts in 2023 and is expected to remain elevated for much of this year.

• Rate hikes are expected to continue over time, while rates are expected to remain stable through the second half of 2023.

• Yesterday's solid improvement in the US Purchasing Managers' Index reinforced the need for further policy tightening, especially as US inflation slows less than expected

• The S&P Composite PMI jumped out of contraction in absolute terms, showing a significant improvement.