Halister News

(Bloomberg) -- Fed Chair Janet Yellen’s testimony to Congress “laid forth a tall order” that employment and inflation both need to evolve in line with central bank’s expectations, Morgan Stanley economist Ellen Zentner and strategist Matthew Hornbach wrote on Tuesday.

• Data on core inflation may disappoint, making near-term rate increase difficult
• Yellen, Fed board need “clearer lens” into “machinations of Congress” to incorporate fiscal policy into outlook
• Two hikes expected this year, with next move in September rather than June, which has higher probability from consensus
  • Continue to suggest investors position for a steeper 5s30s yield curve; those positioned for more than one rate hike by June will be disappointed