From ZeroHedge, June 10:
....Below we share several reactions from Wall Street strategists and economists, all of whom were more or less stunned by just how high "non-transitory" inflation is:
- Goldman, Chief Economist Jan Hatzius: "In our view, the broad-based strength in core inflation tips the balance for the Fed to continue its 50bp-per-meeting pace of tightening through September. We continue to expect a terminal rate of 3.0-3.25%, which will now be reached in 1Q2023 under our forecast."
- Brean Economics: "There were no signs here" of deceleration. "Over the last three months, the core CPI has risen 6.3% at an annual rate, faster than its year-over-year increase of 6.0%. .. This report ought to be disturbing for Fed officials as they prepare for next week’s meeting. We estimate that 61% of the detailed CPI components are seeing price gains over the last year of 6% or more, down only slightly from April’s 63%."
- Schwab Chief Fixed-income strategist Kathy Jones: the hot CPI reading will “keep the Fed on track for more tightening" adding that one should “expect some curve flattening as the market discounts steeper pace of rate hikes.”
- Bloomberg Intelligence, Chief US rates strategist Ira Jersey: “The strong bear flattening given the across-the-board CPI beat is unsurprising. We would expect some profit-taking at some point, but at least tactically a bear flattening may continue into the FOMC meeting next week. We still don’t think the Fed will seriously consider 75-bp hikes, but the market may price for the possibility, and given the strength of core CPI, we think there may be additional 50-bp hikes priced in beyond September. It’s possible the Fed tries to get into restrictive territory this year and will consider pausing after hiking toward 4% to let the ‘long and variable lags’ of monetary policy take effect.”....
....MUCH MORE, including a handy introduction or, if you prefer your facts raw and unfiltered, our posts today were straight from the horse's BLS's mouth:
