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Good morning. Shocks in markets from US inflation, Macron risks losing majority in parliament, Brexit deal and Bitcoin tumbling. Here’s what people are talking about.
Investors rushed to price in more aggressive Federal Reserve rate hikes Monday as the US inflation shock continued to reverberate, sending two-year Treasury yields to a 15-year high and strengthening the dollar. Market participants are awaiting the US central bank’s updated projections on the economy, inflation and interest rates from its policy decision Wednesday, with a 50 basis point hike seen as a given. Traders see 50-50 odds of the Fed raising rates by three-quarters of a percentage point in July. It’s a tough move for Fed Chair Jerome Powell as he is facing a choice between elevated inflation and recession.