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Why Markets Doubt The Fed’s Hawkish Posturing
The market doubts seriously the notion that the Fed will be willing and able to deliver on the two additional rate hikes for 2023 telegraphed by the June SEP.
It was tempting to call the dots a bluff or, less generously, not credible.
For what it's worth, analysts generally doubt the dots too. If you thought a July hike was likely headed into June's pause, you were probably more convinced after Wednesday, but that's about as far as it goes. Nobody I'm aware of believes the Fed is committed to
The Fed is hedging their bets. If they were totally convinced they needed to hike they would have hiked in June. July is live as an option, probably 50/50 in their view. They are not lying, they want to keep their options open.
Employment is strong, wage growth will once again accelerate, UPS workers voted to strike for higher pay. United Airlines just gave their pilots a substantial raise, NYC just raised the minimum wage for delivery drivers, West Coast dock workers are in a slow down/strike for higher pay..,construction jobs(higher paying than average) are increasing with the CHIPS, inflation reduction act….rates are going higher. The market is looking thru rose colored sunglasses