Last week’s inflation data did not meet the bar for further progress towards target, and as such the Fed is likely to raise rates at their Wednesday meeting. On the FOMC itself, we have updated our Fed forecast and now expect 25bp hikes at the September and December meetings. We had previously expected an indefinite pause. Warsh is also likely to take market expectations into account, with markets pricing roughly a 90% probability of a September hike at the time of writing. In other US macro data we have retail sales, housing starts, initial jobless claims & pending home sales. In dated UST supply next week we have $13 BN of 20 year US bond supply on Tuesday and $19 BN of 10 year TIPS on Thursday. In RoW events, we have BOE policy meeting on Thursday where we expect a status quo & BOJ policy meeting on Friday where we expect a 25 bps hike. Middle east conflict remains precarious and we expect Brent to be in the range of 95-110 in the short end. With the closure of the East West pipeline, 6-7 mbpd of crude supply has gone offline from Thursday.
