The Fed looks set to dial up its hawkish pivot a notch or two

Over the past few months the Fed has gradually been turning more hawkish in response to faster-than-expected progress towards its goals. In particular, the spike in inflation has helped to push several measures of inflation expectations higher. In itself this is good news because inflation expectations had been hovering around, or even below, the lower bound of the range consistent with its 2% inflation target for many years.