US equity futures were already sliding this morning as option expirations loomed, but when St.Louis Fed Chair Jim Bullard appeared on CNBC and admitted that "it's natural that [The Fed] has tilted a little bit more hawkish," losses accelerated...
Treasury yields are also spiking, especially 2Y..
And the dollar is extending gains...
This was very much not what traders had been anticipating as they assumed a slew of Fed speakers would come out after Powell's plunge to tamp down fears and offer dovish reassurances.
Bullard then added some more FUD by admitting that there "is some upside risk on the inflation forecast," and confirmed that "Fed Chair Powell has opened the taper discussion this week."
"The taper discussion is open. The Chair made that very clear but it's going to take several meetings to get organized ... the pandemic is coming to a close here so it's very natural that we start thinking about how to pare back emergency measures," says St. Louis Fed's Bullard. pic.twitter.com/yRwXtIe4V2— Squawk Box (@SquawkCNBC) June 18, 2021
So much for transitory!!
"We were expecting an inflationary impulse, but this has been more than what we were initially expecting," says James Bullard. "The ideal path in my mind would be the 3% this year will be okay, and then we'll get it down to 2.5% next year and we'll converge to 2% from there." pic.twitter.com/i9vSio57GM— Squawk Box (@SquawkCNBC) June 18, 2021
Piling on, Bullard admitted that he is a "little concerned about housing market froth", noting that The Fed "is leaning toward idea that it may not need to be buying MBS," adding that "we don't wanna to get back in the housing bubble game... that caused us a lot of distress in 2008."
"I'm leaning a little bit toward the idea that maybe we don't need to be in mortgage-backed securities with a booming housing market and even a threatening housing bubble ... we don't want to get back in the housing bubble game," says St. Louis Fed President James Bullard. pic.twitter.com/fDMkw9ckL9— Squawk Box (@SquawkCNBC) June 18, 2021
Did The Fed just pull the Powell Put?
Someone tell Bullard the Fed is closed today and nobody can save stocks if they crash— zerohedge (@zerohedge) June 18, 2021