With many governors lifting dots for 2023 and some also for 2022, tapering in late 2021 becomes much more likely, which also made for a hawkish readthrough in sharp contrast to the response to the latest couple of surprisingly high inflation reports. Market expected a high CPI and played the peak inflation story when CPI printed at 5%. Into the Fed meeting markets expected a dovish message and didn’t get it. Substantial progress still needed before reducing stimulus, which mostly refers to the labour market at this point, why a couple of strong labour market reports over summer could really start fuelling ... (full story)