- Risks to the outlook have increased with banking stress
- Inflation expectations data show confidence Fed will control inflation
- Jobs market may be lagging indicator right now
- Banking stress will make some firms more conservative in activities
- Prior to banking stress, I had expected the Fed to raise rates more than the prior projection
- It's hard to lower inflation without some rise in unemployment
- Getting inflation down argues for no rate cuts this year
- It's premature to say what the Fed should do at the next meeting
The Fed funds futures market is pricing in a 55% chance of a hike at the next meeting, with the remainder at 'no change'.