Calls for a Fed hike grow louder after today-Dollar index tests 2024 high at 105.10

The US stock markets are now paring their earlier opening losses. Gold has rebounded from a brief look below $2,320, but the dollar remains elevated and close to session highs. It is off its best levels though, as US stocks try to recover. That said, please cast an eye over the US bond markets and you will see the 2 Year note is now more than 0.20% higher and the 10 year note is approaching 0.15% higher following that hot CPI data. Look, we can dress this up anyway we like, but the truth of the matter is that US inflation is not falling back and not in any kind of way the Fed would like to see. There are many on the Fed who are desperate to cut rates, but that is increasingly a non-starter and increasingly there is a growing notion; that the Fed may have to raise rates again to cool the US economy. The calls for that are now rising and if we look at what impact 5.50% of Fed tightening has had on the US economy it is fast becoming clear, that may not be enough. The dollar is well aware of that now and that is what has pushed the USD index (USDX) to test the 105.10 (2024 high) level again this afternoon