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Strong US Consumers Continue to Drive Hot Inflation, Cementing a Fed Hike Next Week
Core inflation surprised higher and dominated GDP in terms of market attention as the yield on the 2-year Treasury climbed by 9bps and pricing for next Wednesday’s FOMC meeting inched closer to a full quarter point and terminal rate pricing moved up 3–4bps to price part of another quarter point hike at the June meeting. The S&P is shaking it off with a gain of 0.8% so far this morning as earnings and the consumer’s resilience are mattering more. GDP did indeed surprise lower, but not at all for the reasons that were the subject of much speculation over the last couple of days or so. Core PCE inflation ... (full story)