With today's CPI print (and its 'ghost' YoY data and healthcare plug) on everyone's mind, hawkish comments from Fed Governor Chris Waller already gave markets a jolt this morning, pushing bond yields off their lows, with the biggest moves at the US short-end.
“If, as I expect, the monthly rate of inflation improves in October, I am leaning toward supporting an increase in our policy rate of 25 basis points,” Waller said in a speech in London.
“But if the October CPI inflation data out later today are similar to the past two monthly readings — with core CPI inflation around 0.3% or even higher — then a stronger policy move may be needed,” he said.
“In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting.”
The remarks sent the dollar higher, stocks lower, and pushed Dec rate-hike odds to almost certainty (well 100% odds of a 25bp hike, not 50bps)...
And that's before the CPI print...
Headline Consumer Prices rose 0.4% MoM (vs +0.3% MoM exp and +0.6% MoM prior). With the healthcare plug and YoY data snafu (BBG has backfilled the data via extrapolation), this is HOTTER than expected..
Only 1 of 70 analysts expected hotter than this...
READ MORE AT SOURCE »
« Back to The Culture War
