25 May 2023

Yields and the dollar continue to push higher after minutes taken during the Federal Reserve’s May meeting seemed to show policymakers questioning whether regional bank turmoil would meaningfully slow inflation. According to a record published yesterday, “Several participants noted that if the economy evolved along the lines of their current outlooks, then further policy firming after this meeting may not be necessary,” but “Some participants commented that, based on their expectations that progress in returning inflation to 2 percent could continue to be unacceptably slow, additional policy firming would likely be warranted at future meetings.”