Michel Bowman

  • Another 75 bps fit in July and upsides of at least 50 bps in the ‘few subsequent meetings’
  • Further increases may be required after that, depending on how the economy develops
  • I’m committed to getting real federal money back into positive territory
  • It makes sense to eventually sell the Fed’s MBS holdings
  • Labor shortages are likely to persist in many sectors
  • Global supply chain problems persist as lockdowns in China slow production
  • You need to use the Fed’s tools to process inflation

These are strong comments. 75 basis points brings the Fed up to 2.25-2.50% at the next meeting. A 50 basis point hike in the “next few meetings” can be counted as at least 3 meetings, which would be 3.75%-4.00%.

Currently, the fed funds market is pricing in a peak in the 3.25-3.50% range as focus shifts to growth.