The Fed will likely be forced into debating moderate overshooting of the inflation target but it still seems as if the market discards big directional surprises to the inflation outlook. The Fed will not be convinced of a sustained pressure in June. Highlights - Powell will be forced to quantify “moderate overshooting" - The Fed is not yet convinced that inflation will prove sustainably high - One hike to be signaled in 2023 in the new dot plot - A 5 bps hike to the IOER and wider capacity in the ON RRP facility to be announced The FOMC and Jay Powell is now faced with inflation clearly above target ahead of next ... (full story)