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Bloomberg reports that markets increasingly expect the Federal Reserve to tighten policy after Congress approved large tax cuts and spending increases. Futures pricing implies the Fed's short-term rate will reach 2% by December, a quarter point above expectations from three months earlier.
Inflation and wage growth are cited as signs the economy is heating up.
Higher expected US rates tend to support the dollar, which weighs on dollar-priced commodities and can slow export demand. The fiscal-stimulus driver also raises the chance of faster tightening, which increases pressure on feed margins.
bloomberg.comMark WhitehouseFeb 12, 2018After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
