- We think the Federal Reserve is likely to remain hawkish both in policy and communication until there is a turn in either the labor data or an improvement in inflation.
- Housing activity is already decelerating and is at the leading edge of Fed policy. As housing activity slows, pricing should normalize off of elevated levels.
- We believe the Fed will try to avoid being a source of market volatility, but rather emphasize its data-dependent approach while seeking to ensure that its reaction function is well articulated.
For further details see:
U.S. CPI Should Keep The Fed Hawkish - For Now