Expectations for the Fed to raise interest rates rise🌏
After the release of retail sales data, the forecast of the Atlanta Fed's GDPNow model was raised to 5.4%. The 2-year yield rose above the high on May 21 and approached 5.20%. With the overall U.S. Treasury yield curve rising by 15 basis points (continuous (5-day fluctuation of more than 10 basis points), long positions in fixed income were fully unwound; adding fuel to the fire, the Fed's Barkin broke the (dovish) stance, saying that the Fed tried to "overcorrect and undercorrect" in terms of policy He needs to see further evidence that "weak demand is affecting inflation." Although he favors keeping interest rates unchanged for the time being, the Fed "has not yet reached its target" in fighting inflation; supported by strong economic data, in December The probability of a rate hike is back up to 36%, and even the probability of a January 2024 rate hike has increased slightly to just over 10%. Powell's speech tomorrow at the Economic Club of New York is now even more important. It will be the first time the Fed has gone silent. The last official talk before the period.
