- Inflation remains too high
- The core question is if financial conditions today are sufficiently restrictive
- Labor market is still too tight
- Still looks like trending towards 3% inflation
- We’ll need to see tight financial conditions to bring inflation to 2%
- My expectation is we’ll see growth slow but we’ve been wrong before
- Key question on long-term rates is what was driving it
- If it was on the back of strong economic growth, FOMC would have to deliver on expectations
- If rise in long end driving by term premium, it could do some of the Fed’s work
- Will watch to see if retracement of long-rates continues
She’s sounding more hawkish here.
This article was written by Adam Button at www.forexlive.com. Source