Our view is that it will be difficult for the Fed to take a dovish position with CPI above 7% given a CPI target of 2%. Further, the entire Treasury yield curve remains in negative territory.
Recall that Powell wants to see positive real rates across the yield curve as he said in his September FOMC remarks (see our previous note here: https://tek2day.com/2022/09/30/positive-real-yields/). Powell’s September 2022 FOMC comment below:
You must be logged in to post a comment.