Rates as of 0500 GMT

Market Recap

Official comments on fighting inflation dominated trading yesterday. NY Fed President Williams V reiterated the Feds plan to move expeditiously in bringing the federal funds rate back to more normal levels this year and said he thought there was a good chance the Fed could achieve a soft, or softish, landing for the economy. Note the term softish, which Chair Powell has also used. They are using this term to warn people that after all, the point of raising interest rates is to slow the economy, which inevitably leads to higher unemployment as a way of dampening demand. Williams said he would not define a soft landing as unemployment staying at 3.6, i.e. get ready for higher unemployment.

Later, Cleveland Fed President Mester V supported 50 bp rate hikes at the next two meetings and put forward a similar view to that of Fed Chair Powell to bring the policy rate back up to neutral and then evaluate if more tightening is needed. However, she also cautioned that a 75 bp rate hike should not be ruled out forever and that the Fed could have to speed up in the second half of the year if inflation didnt ease. Shes known to be one of the more hawkish members of the Federal Open Market Committee FOMC.

US President Biden got in on the act too. He gave a speech on inflation, saying that fighting inflation is his top domestic priority and laying out his administrations plans to lower prices on things like gasoline, which hit a record high on the…