• We need to get to 2.50% and quickly
  • 75 bps helps us to get to neutral stance
  • We should be above 3% by the end of the year
  • No ready to decide on 50/75 for July 27 meeting
  • If demand softens, 50 bps for July may be good
  • We're starting to see signs of softening demand
  • Could have a couple of negative GDP quarters
  • Balance sheet shrinkage is essentially on autopilot
  • If we need to decelerate or accelerate economy, we will do that via Fed funds rate

The Fed is at 1.50-1.75% so getting to 2.50% might only be one meeting away. The market continues to price in a terminal top near 3.75%.

 Inflation  is a big concern but today's 7% drop in oil prices is certainly helpful for the Fed.