美国经济周报：更具鹰派色彩的反应机制

We were neither expecting the sharp rise in energy prices nor the Fed's increased willingness to react to them with higher interest rates. A reaction function that includes energy prices means risks skew hawkish in the near-term and make it hard for the market to price-out aggressive rate hikes until data convincingly show either slowing inflation or softening activity. That dynamic took Treasury yields meaningfully higher this week. But fundamentally, we see underlying inflation cooling. Higher long-term interest rates should slow growth and loosen labor markets. In our base case, the Fed will pursue significantly less hawkish policy than what is currently priced by the market. At least three factors pushed yields higher: energy prices increased, US data show resilient growth with above-target inflation, and Chair Warsh expressed a more hawkish reaction function that directly reacts to supply shocks. Most measures of underlying inflation are slowing, with core CPI at 2.4% YoY. We expe