Ecoinometrics - Why would the Fed crank up the rate hike to 11?

The FOMC minutes in context

The more I look at the data, the more I read the official words from the Fed, the more I feel for those investors that are still waiting for an imminent pivot.

In light of the FOMC minutes and the latest data releases let’s break down what stage of the tightening cycle we are at.

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Why would the Fed crank up the rate hike to 11?

The takeaway

The tl;dr of the FOMC minutes plus the latest inflation data is that:

• Inflation is stickier than the Fed had anticipated. 

• They will likely have to go with another rate hike on June 14.

• The Fed forecasts a recession but we are still months away from it.

• Risk assets don’t seem to care about all that right now but history says nothing good happens until after the economy is in an actual recession.

That’s for the overview. Now let’s dig deeper into what the data says.