Dollars and Jens
Thursday, June 08, 2006
Incidentally, there seems to be a developing consensus now around another hike at the end of the month. The one point I want to make is not to bet more money than you'd be willing to lose on it until after the inflation reports next Tuesday and Wednesday. If those come in at 0.3%, though, the doves will be facing a real headwind.
Update: I want to clarify that I meant the core rate when I said 0.3%. Market expectations are for the headline numbers to come in at 0.4% or so, but the core numbers to come in at 0.2%. If they do, the fed is still likely to raise rates, but it seems to me the wiggle room still exists. At 0.3%, the markets would really need an explanation if the fed stood pat.