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Minutes: BMO FICC - Hawkish Risk From Potential 75/100bp Hike Talk

FED

BMO FICC think the May FOMC minutes release "carries with it a meaningful amount of event-risk; most of it hawkish. Recall, the May vote was unanimous in favor of a half-point hike; leaving the minutes as an ideal forum for any differences of opinion to be articulated."

  • They point specifically to references to participants "more hawkishly-minded advocating for a 75 bp hike if not 100 bp. It’s those headlines that will presumably define the initial reaction to the minutes release; along with any guidance related to the prospects for the outright sales of MBS from SOMA."
  • They note that risk assets' weakness since the meeting implies "the minutes will be somewhat stale; although not so much so as to completely discount their potential market impact."

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