Raging Debate: How Serious Is The Fed About Inflation?

Fed Chair Jerome Powell from Fed image file, annotation by Mish

Serious Debate 

Kashkari and Evans are the mostly dovish FOMC members.

They want 7-8 hikes this year.

The Fed is serious and investors are going to find out that 50 bps hikes are on the cards, and possibly multiple times this year.

— Alf (@MacroAlf) March 18, 2022

Serious Bullsheet

That is where we are. And that is where the Fed always has been ever since Volcker. 

Five Things to Expect in May

1. A quarter-point hike
2. A second dissent
3. Powell will announce the QT initial schedule by running down the balance sheet, not outright selling
4. QT will not even start immediately. It's more likely Powell will want to telegraph the start to not upset the market. So look for QT to start in June, with a natural runoff.
5. Powell will promise to get tough if necessary 

In May we will see how serious the Fed is. The more serious the Fed is, the more likely a recession starts this year, not next.

Seven to eight hikes this year? Seriously?

For more on why the Fed won't get serious, please see Existing Home Sales Dive 7.2 Percent Wiping Out January's Big Month