VIEW: RBC: Faster, Faster, Faster, Faster…

RBC note that “the Fed is responding to inflation expectations that are bordering on unhinged. We don’t view the hawkish leanings in these Minutes as “jaw-boning” nearly as much as we think it’s playing catch-up on a long overdue adjustment in both narrative and policy. The market is right to think a March hike is nearly a done deal. We also fielded questions about Omicron and the possibility that it would cause some pause on a sooner liftoff. The Fed is now far more worried about inflation than anything else, and they had this to say about Omicron and inflation: “global supply-side frictions…could be exacerbated by the emergence of the Omicron variant”. Right now, it strikes us that the Fed is more worried about the inflation impact associated with this variant.”