UBS On-Air: Paul Donovan Daily Audio 'Another failure of the Fed?'

The minutes of the Federal Reserve struck a hawkish tone, with lots of protestations about rates staying high until inflation convincingly declined. There are two reasons the Fed may fail to convince markets. First, since the June 2022 policy errors, there is little reason for investors to trust what the Fed says it will do with policy. Second, investors see reasons why inflation will convincingly decline. Profit-driven inflation is less sticky than wage-driven inflation, as the record breaking durable goods price disinflation has shown.