Bigger, Faster… Wronger?
Markets continue to brace for bigger and faster rate hikes from the Federal Reserve after Jerome Powell appeared to reverse earlier optimism about an ongoing “disinflationary process” during yesterday’s Senate testimony. Market-implied odds on a half percentage point move at the March meeting moves above 70-percent in the hours after the Fed chair’s appearance, and have barely subsided since. The two-year Treasury yield is holding above 5 percent for the first time since 2007, the dollar is trading higher, and most majors remain on the defensive. “The latest economic data have come in stronger than expected, which suggests that the...