- At the FOMC meeting, the median outlook for core inflation this year drifted up to three percent from 2.1 percent (though the long-term inflation outlook didn’t change).
- Of more direct market consequence, the median “dot plot” around the Fed funds rate in 2023 had shifted to suggest two rate hikes that year from the zero lower bound.
- In recent weeks, we have seen a distinct pullback in key industrial commodities prices. Bond prices have stayed firm through a series of higher-than-expected increases in producer and consumer prices. And the USD, which tends to weaken when inflationary expectations go up, has gained strength.
For further details see:
Summer Of Volatility?