Macquarie Strategist: Fed's June Shift May Not Stabilize Inflation Expectations

Macquarie Group's global foreign exchange and interest rate strategist, Thierry Wizman, stated in a report that even if the Federal Reserve signals a shift to a neutral stance in June, it may not be sufficient to stabilize inflation expectations and long-term U.S. Treasury yields. According to Jin10, Wizman noted that the slightly upward-sloping overnight index swap forward curve currently reflects only one rate hike in 2026. To quell inflation concerns, the Fed's language must be more hawkish than what the curve currently indicates. He mentioned that from now until June 6, the Federal Reserve will have a series of minor speeches, providing opportunities to decisively shift its rhetoric to a more hawkish tone.