Comment
As the chart above shows, the market has priced in a June rate hike as a virtual certainty. There is no need for the qualifying language used below. At this point, the market would only be shocked if the Fed failed to hike.
- The Wall Street Journal – Fed Minutes to Offer Clues on Debate Over Path of Rate Increases|
Federal Reserve officials left their benchmark short-term interest rate unchanged within a range between 0.75% and 1% at their meeting May 2-3, and minutes of that gathering could indicate whether they are preparing to lift it by a quarter percentage point at their next meeting June 13-14. The minutes, to be released 2 p.m. EDT Wednesday with the usual three-week lag, are likely to provide more detail on the internal debate over the path of rates. They also could shed light on evolving plans to shrink the Fed’s holdings of bonds and other assets. Here are five things to watch for. - Reuters – U.S. rate hike in June ‘a distinct possibility’ -Fed’s Harker
“I think June’s a distinct possibility … quite possible,” Patrick Harker told reporters. But “if we get another surprise on inflation to the downside, that would worry me a little,” he said when asked what might delay that policy tightening.