PCE might spike to 3.9%, Fed officials lining up to hawk – Rate hikes are on the way
April CPI year-over-year jumped to 3.8%, hitting a nearly three-year high, while PPI surged to 6%. Energy costs are fully transmitting to the service sector. Market expectations for April's core PCE have been raised to 3.2%-3.3%, with the overall PCE potentially reaching 3.9%.
The internal sentiment at the Fed has shifted. The minutes from the April meeting reveal that the "majority" of officials believe that if inflation remains above 2%, rate hikes "might become appropriate," with even "many" officials calling for the removal of language suggesting future rate cuts. This marks the largest internal divergence within the FOMC since 1992.
The interest rate futures market has priced in over a 60% chance of a rate hike before December, with the 10-year Treasury yield nearing 4.7% at one point, and the 30-year surpassing 5.2%, hitting a new high since 2007. Rate hikes are no longer a "black swan" event but are being factored into the baseline scenario.
#PCE #宏观预警 $HYPE
April CPI year-over-year jumped to 3.8%, hitting a nearly three-year high, while PPI surged to 6%. Energy costs are fully transmitting to the service sector. Market expectations for April's core PCE have been raised to 3.2%-3.3%, with the overall PCE potentially reaching 3.9%.
The internal sentiment at the Fed has shifted. The minutes from the April meeting reveal that the "majority" of officials believe that if inflation remains above 2%, rate hikes "might become appropriate," with even "many" officials calling for the removal of language suggesting future rate cuts. This marks the largest internal divergence within the FOMC since 1992.
The interest rate futures market has priced in over a 60% chance of a rate hike before December, with the 10-year Treasury yield nearing 4.7% at one point, and the 30-year surpassing 5.2%, hitting a new high since 2007. Rate hikes are no longer a "black swan" event but are being factored into the baseline scenario.
#PCE #宏观预警 $HYPE