Governor Bullock addresses Parliament

• RBA Governor Bullock is speaking before Parliament’s Standing Committee on Economics this morning, having flagged that inflation is likely to remain elevated for some time, driven by both capacity pressures and the conflict in the Middle East.
• Markets are pricing around an 83% chance of a hike at the next meeting, with the RBA having assessed that the risks to its outlook remain skewed to the upside.
• The Fed hiked 25bp yesterday, though markets pared the initial move, with the US 10yr falling 7bp to 4.93% and the 2yr down 6bp to 4.67%, as investors took comfort in the Fed’s inflation fighting resolve and softer oil prices.
• Warsh’s commentary framed inflation as a larger problem than previously anticipated, with the data continuing to show little progress back towards the 2% target, however, the commitment to tackling it appears to have reassured investors.