Fed officials were 'spooked' by the May CPI report, and 'they’re not going to like the June one either,' says this analyst.
Reading between the lines of the Federal Reserve’s June 14-15 meeting minutes, at least one thing becomes clear: Policy makers were officially “spooked” by May’s CPI print of 8.6%, according to inflation analyst Omair Sharif.
Financial markets appeared to take the Fed’s minutes in stride on Wednesday, with Treasury yields snapping a four-session string of declines and U.S. stocks DJIA, +0.23% SPX, +0.36% COMP, +0.35% ending slightly higher. The initial read by big investors like portfolio manager Bob Miller of BlackRock Inc. is that the minutes provided a recap of the Fed’s June 15 decision to hike by 75 basis points, but failed to provide much meaningful new information. Sharif sees otherwise.
“If you read through the minutes, it’s clear that the Fed upgraded the inflation problem to a five-alarm fire that requires it to now move expeditiously past neutral to restrictive,” he wrote.
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