J.P. Morgan turns hawkish on Fed after Warsh inflation comments
Federal Reserve preferred inflation data for June came in below consensus, helped by lower energy prices. Wall Street reacted more to the lack of “transparent strategy” than to a 9-3 hold on rates. Economist Michael Feroli expects a 25 bp hike in December. After Warsh’s post-meeting remarks, J.P. Morgan abruptly shifted its Fed-rate outlook to a hawkish stance and questioned the new chair’s inflation credibility.