The Fed's Reaction to Inflation

The dollar is moving higher, especially when you see a different policy decisions happening this week. The key takeaway we call out here is that money markets are pricing in twice as much easing by the Fed as they do see out of the ECB over the next two years. We see that the dollar is slightly undervalued on a carry basis. And it seems to us that the market kind of run with this dollar bear narrative at least too far into the short term.