Doing the job of the Fed

Mr Market believes that the regional banking crisis has done a good part of the job of the Fed in tightening monetary policy. At least this is what the market implied fed rates are telling us as they have noticeably decreased since the bank run on Silicon Valley Bank. This may prove too optimistic. First inflation remains sticky, especially in the service sector. Also, as the news over the weekend that OPEC will cut oil production by more than 1 million barrels a day, shows that external inflation chocs can always happen. We conclude that the fight on inflation is far from over.