St. Louis Fed Pres. James Bullard in a Financial Times interview is leaning toward a hike in June:
- higher rates are insurance against inflation
- he will keep an open mind going into June meeting but is inclined to another hike
- fall in treasury yields offsets banking sector tightening
- still believes rates are at the low end of sufficiently restrictive with the top and seen above 6%
- better and more prudent to be in the middle of the zone (i.e. 5.5% ish)
Bullard is more of a hawk but has been lightning up of late. These comments are back toward the hawk. Earlier today Fed's Logan said that at the moment, she would support a hike in June (contingent on the data).
The calming of the banking crisis may have policymakers leaning more toward inflation concerns versus the impact of higher rates and banking concerns. Also, as stocks heat up, perhaps Fed officials are also tilting more toward the risks of higher stock gains fueling more spending and higher inflation.
The chance of no change in policy at the June meeting has increased to around 30% from 25% yesterday.
- 2 year yield is at 4.230% up 7.5 basis points
- 10 year yield is that 3.64% up 5.9 basis points
US stocks have come off their high levels:
- Dow Industrial Average is down -150 points or -0.45% at 33270.29. The high price reached 33492.48
- S&P index is up 6.4 points or 0.15% at 4165.20. It's high price reached 4186.20
- NASDAQ index is up 93 points or 0.78% at 12598.56. It reached a high of 12664.11