Dovish Hike Since Silicon Valley Bank collapsed, I have been caught between two potential paths for the Fed at this meeting. The first path is one the Fed has followed

Last Minute Thoughts Ahead of the FOMC Meeting Quick reminders as we head into this week’s FOMC meeting: We expect the Fed to hike rates 25bp. The Fed is caught

Monday Morning Notes, 3/20/23 If You Don’t Have Time This Morning This week we begin rebuilding a framework to understand the path of monetary policy after fixed income markets became

Beyond March This next Fed meeting is not about the data. The data supports a rate hike, and most likely the Fed would have hiked rates 50bp in the absence

Continued Financial Stress Argues for a Pause This is a fast-moving situation. While the economic data calls for additional rate hikes, the Fed does not hike rates in periods of

Monday Morning Notes, 3/13/23 Ironically, a common theme in our New York and London client meetings over the past two weeks was the seemingly uncanny ability of financial markets to

Powell Drops the Hammer Federal Reserve Chair Jerome Powell dropped the hammer in today’s testimony, making clear that the expected terminal rate will move higher and putting a 50bp rate

Monday Morning Notes, 3/6/23 If You Don’t Have Time This Morning Recent data is pulling Fed speakers toward a higher terminal rate than implied by the December SEP but they

Monday Morning Notes, 2/27/23 If You Don’t Have Time This Morning Last week’s core-PCE inflation numbers dashed hopes for a rapid decline of inflation. Indeed, claims that the disinflationary process

Stale Minutes Offer Little New Guidance The minutes of the Jan/Feb FOMC meeting gave no indication that there was anything but broad support for stepping down to 25bp but also

Tuesday Morning Notes, 2/21/22 If You Don’t Have Time This Morning Whereas the Fed expected the economy would continue slowing this year, incoming data indicates that first quarter activity firmed.

Now Waiting For The Next Round of Data The Fed left the last FOMC meeting unprepared for the economy to stabilize let alone re-accelerate in the manner suggested by incoming

Quick Note on CPI Core CPI for January came in at expectations, and has now firmed over the past two months: Core less shelter and used cars remains off the

Monday Morning Notes, 2/13/23 If You Don’t Have Time This Morning The Fed is searching for the terminal rate for this cycle and has its eye on 5.125%. The outcome,

Monday Morning Notes, 2/6/23 If You Don’t Have Time This Morning Last Thursday I thought that this would be a shorter note and that we could all catch a break

Quick Note on Powell Federal Reserve Chair Jerome Powell’s comments today fell in line with our expectations. Powell noted approvingly that financial markets tightened after last week’s data dump, appearing

Some Follow Up I have been fielding several good questions about my note last night. Below is a short note to highlight some of my answers. The Fed is focused

Market Participants Moving Past the Fed The Fed stepped down to 25bp rate hikes today as expected and signaled more to come. We think a March rate hike is a

Quick Note on ECI ECI came in on the soft side with deceleration in wages, benefits, and wages excluding compensation: Federal Reserve Chair Jerome Powell has elevated the importance of

Monday Morning Notes, 1/30/23 If You Don’t Have Time This Morning The Fed will downshift to a 25bp rate hike at the conclusion of this week’s FOMC meeting while indicating