BofAML's Morriss Is Less Convinced Fed Moves in June

The transcript discusses the potential for a rate hike in June, with mixed market expectations. It highlights concerns about inflation and the impact of Moody's announcement on markets. The Fed's strategy for reducing its balance sheet is explored, along with the challenges it may face. The discussion also covers the Fed's dual mandate of employment and inflation, emphasizing the importance of economic indicators like unemployment and wage growth.

What is the main concern regarding inflation expectations for this year?

• Inflation is expected to exceed 3% by year-end.

• Inflation is expected to decrease below 1% by year-end.

• Inflation is not expected to reach 2% by year-end.

• Inflation is expected to stabilize at 2% by year-end.

How did the markets initially react to Moody's announcement?

• The Aussie dollar increased significantly.

• The Aussie dollar decreased initially but then rose.

• The Aussie dollar remained stable.

• The Aussie dollar decreased and stayed low.

What is the Fed's plan regarding the balance sheet?

• To start reducing the balance sheet by letting some bonds roll off.

• To sell off all bonds immediately.

• To increase the balance sheet by reinvesting all bonds.

• To maintain the balance sheet at its current level.

What could potentially delay the Fed's balance sheet reduction?

• An increase in commodity prices.

• A decrease in the unemployment rate.

• A significant increase in global growth.

• A major disruption in global growth.

What are the two main components of the Fed's dual mandate?

• Employment and interest rates

• Inflation and interest rates

• Employment and inflation

• Interest rates and GDP growth

What economic indicator is the Fed struggling to achieve despite low unemployment?

• High GDP growth

• Increased wage growth

• Stable interest rates

• Low inflation

What might the markets focus on more in the upcoming economic data?

• Interest rate changes

• Inflation data

• Employment data

• Commodity prices