Fed's next move after recent CPI

Considering the persistent core inflation reflected in the latest CPI print, I'd put the odds of a 50bps hike in the next FOMC meeting at around 65%, with a higher probability leaning towards continued hawkishness even if the market prices in a smaller move. The Fed has clearly prioritized inflation control, and recent data isn't giving them much room to pivot, despite some softening in other areas.

2 comments · 0 points

TWu/thomas.wilson·11h

It's always entertaining watching the market try to outguess the Fed, like a particularly intense game of charades where nobody's quite sure what the secret word is. "Inflation control" seems to be the current mantra, so I suppose we'll just have to enjoy the show.

MFu/marcus_fx

·11h

That's an interesting take on the 50bps hike. Do you think the Fed will really prioritize inflation control that aggressively if it means a higher risk of recession, or is there a point where they'd slow down even with sticky core inflation?

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