END OF DAY REPORT JUNE 9th

HIGHLIGHTS- EQUITIES, FUTURES & OPTIONS

 Given that there was little news out and that the focus will be on the Fed next week, lets go through the May Meeting Recap



PRIOR MEETING: The Fed hiked the FFR by 25bps to 5.00-5.25% as expected, with the IOER raised by 25bps to
5.15%. Crucially, the statement saw the removal of the line that it "anticipates more policy firming may be appropriate" to
attain a sufficiently restrictive stance, instead softening that to "in determining the extent to which additional policy
firming may be appropriate", it will take into account tightening to date, policy lags and other developments. WSJ's
Timiraos, to wit, "The FOMC statement used language broadly similar to how officials concluded their interest-rate
increases in 2006, with no explicit promise of a pause by retaining a bias to tighten." Otherwise, there was little else new
in the statement but it did maintain its language that banks are "sound and resilient" in the face of recent jitters.
MINUTES: The FOMC’s May meeting minutes reflected the mixed nature of Fedspeak seen in wake of the
announcement. Whilst Fed policymakers agreed "the extent to which additional increases in the target range may be
appropriate after this meeting had become less certain," "some" said that "based on their expectations that progress in
returning inflation to 2% could continue to be unacceptably slow, additional policy firming would likely be warranted at
future meetings." And while "some" thought more hikes would be needed, "several... noted that if the economy evolved
along the lines of their current outlooks, then further policy firming after this meeting may not be necessary," while
"many" recognised the need for optionality. On the fiscal circus in Washington, officials had "concerns that the statutory
limit on federal debt might not be raised in a timely manner, threatening significant disruptions to the financial system
and tighter financial conditions that weaken the economy." Goldman Sachs said the minutes highlighted a range of
views on the FOMC, but still suggest that a June pause is the base case; "Since the FOMC’s May meeting, the Fed
leadership, including Chair Powell, have emphasized that monetary policy is restrictive and that risks to monetary policy
have become more two-sided," the bank writes, "we see these comments as consistent with our expectation for a pause
at the FOMC’s June meeting.