US Inflation: When you’re hot. You’re hot.
· December inflation 7% with core at 5.5%
· Yesterday, Fed Chair Powell told Congress that it made sense to raise rates sooner to prevent inflation expectations from becoming entrenched
· A March rate hike is almost a done deal.
Omicron might delay lift-off for a meeting, but it is clear the Fed wants to raise rates.
The market is now prepared for up to 4 hikes this year.
This is a remarkable turn of events. It was just a few months ago (September) that Chairman Powell conceded that perhaps only one hike in Q4 of 2022 might be warranted.
