Florian Ielpo, head of macro at Lombard Odier, says market moves reflect a re-pricing of the Fed’s credibility and independence. He says inf has clearly returned to the center of the Fed’s reaction function and that policymakers are steering accordingly, reinforcing a higher-for-longer profile for real rates. He adds the Fed has adjusted its tone: communications are crisper and more directive, dissenting language has been dropped — much previous wording has been discarded and this should be seen

Florian Ielpo, head of macro at Lombard Odier, says market moves reflect a re-pricing of the Fed’s credibility and independence. He says inf has clearly returned to the center of the Fed’s reaction function and that policymakers are steering accordingly, reinforcing a higher-for-longer profile for real rates. He adds the Fed has adjusted its tone: communications are crisper and more directive, dissenting language has been dropped — much previous wording has been discarded and this should be seen as a small monetary policy revolution.