Overview
- Citing Wednesday's FOMC minutes, a majority of officials said 'some policy firming would likely become appropriate' if inflation remains above the Fed's 2 percent goal.
- Market pricing shifted sharply in mid-May as Treasury yields climbed to fresh 52-week highs and 20- and 30-year yields reached levels not seen since 2007.
- Bond-market moves lifted consumer borrowing costs and pushed the average 30-year mortgage rate to roughly 6.75 percent, squeezing housing affordability.
- Major central-bank officials in Japan, the euro area, and the U.K. have publicly signalled readiness to tighten policy if energy-driven inflation persists, complicating global policy paths.
- Kevin Warsh takes over as Fed chair with a divided committee, and markets will watch upcoming inflation prints, oil flows through the Strait of Hormuz, and next central-bank meetings for direction.