WSJ reports "A string of troubling inflation reports in recent days is likely to lead Federal Reserve officials to consider surprising markets with a larger-than-expected 0.75-percentage-point interest rate increase at their meeting this week"

• "Before officials began their pre-meeting quiet period on June 4, they had signaled they were prepared to raise interest rates by a half percentage point this week and again at their meeting in July. But they also had said their outlook depended on the economy evolving as they expected".


• "Last week’s inflation report from the Labor Department showed a bigger jump in prices in May than officials had anticipated."


• via WSJ
  

Reaction details (20:33)

• In wake of the report Treasuries extended losses to session lows to see the 10yr T-Note (U22) fall from 115-07+ to lows of 114-20+ a few minutes after.


• Fed funds futures price in circa 57% of a 75bp move in June, up from c. 25% earlier in this morning. 

Analysis details (20:28)

• The WSJ reporter, Nick Timiraos, is the Chief economics correspondent at the WSJ and is a highly respected journalist amongst the Fed.


• He does not appear to cite any sources but it is worth noting on February 11th (ahead of the Fed's 25bp lift off in March) the slew of articles across BBG, CNBC and WSJ in the blackout period that played down the idea of a 50bps move after remarks from Bullard, which turned out to be true, leading to some speculation the journalists of the articles had some insider knowledge of the Fed's decision making.

13 Jun 2022 - 20:19- Fixed IncomeData- Source: WSJ