Party Off, Wayne
Thursday's key macro story -- or one of them, anyway -- was the stark juxtaposition between the Fed's message vis-à-vis market pricing for the terminal rate and the Bank of England's.
Jerome Powell's press conference the day before was a clear green light for markets to push the issue. Rates will likely need to go higher than the September projections suggested, he said, and markets should focus on that instead of the pace at which the Fed hikes going forward. Analysts upped their projections
Every’s comment seems particularly relevant in that Powell seems to attribute a significant proportion of the current inflation to the “wealth effect” which, in turn, he sees as an outgrowth of the rise in the financial markets. Powell has made it clear he wants to reduce the wealth effect until it no longer drives inflation.