RATES DO GO HIGHER I THINK YOU HAVE TO BE PREPARED FOR THAT >> JOINING US NOW, THE CHIEF U.S. ECONOMIST WITH SGH MACRO ADVISERS TIM, GREAT TO HAVE YOU ON THE SHOW >> THANKS FOR HAVING ME. >> PAUSE, SKIP, HAWKISH HOLD IT'S REALLY THE SUMMARY OF ECONOMIC PROJECTIONS THE SEP AND THE DOT PLATT, ISN'T IT >> THAT'S GOING TO BE A BIG PART OF HOW THE FED IS GOING TO WANT TO SIGNAL THAT THIS IS A SKIP AND NOT A PAUSE. IF IT'S A SKIP, THEN REALLY THE EXPECTATION IS YOU'RE GOING TO WANT TO HIKE IN JULY, AND FOR THAT TO HAPPEN, IF YOU KNOW YOU WANT TO DO THAT, IT REALLY NEEDS TO SHOW UP AS A SMALL INCREASE IN THE DOTS, THE 25-BASIS POINT. >> WHAT DO YOU EXPECT IN TERMS OF FORECAST AND WHAT DO YOU EXPECT IN TERMS OF MESSAGING FROM POWELL THIS WEEK? >> I THINK THE FORECAST WILL BE J GENERALLY SUPPORTIVE FOR ANOTHER RATE HIKE. WE SHOULD GET A SLIGHT INCREASE IN THE CORE CPI INFLATION. EXPECT THAT UNEMPLOYMENT WILL BE REVISED DOWNWARD AND THE GROWTH FORECAST SHOULD BE REVISED UPWARDS, SO, I THINK THE MIX HERE IS POINTING TOWARD ANOTHER RATE HIKE. >> THE MARKET IS GOING TO PAUSE FOR NOW. WE LOOK AT THE CPI REPORT TOMORROW, WHAT HAS TO BE IN IT TO GIVE THE FED KIND OF THAT PERMISSION TO PAUSE, THAT THE MARKET IS EXPECTING THE FED TO GET? ARE THERE PARTICULAR LINES YOU'RE GOING TO BE LOOKING AT THERE? >> YEAH, SO, THE FED, I THINK, IS TRYING TO SET THIS UP IN SUCH A WAY THAT THE DECISION IS KIND OF INVARIANT TO THE DATA THAT IT'S REALLY NOT A DATA-DRIVEN OUTCOME. THE IDEA OF A SKIP, A PAUSE, HOWEVER YOU WANT TO CALL IT, IS THAT YOU'RE GIVING TIME FOR THE DATA TO TELL YOU A STORY DO YOU NEED MORE RATE HIKES OR NOT? ARE YOU AT SUFFICIENTLY RESTRICTIVE? SO, I THINK THE FED HAS BEEN TRYING TO SAY, LOOK, WE'RE MO MOVING TOWARD A SKIP STRATEGY. THE DATA HERE IS NOT AS IMPORTANT FOR THIS MEETING AS WE THOUGHT. AND REALLY, WHAT TOMORROW'S CPI REPORT IS MORE ABOUT TRYING TO SAY, OKAY, THIS IS EVIDENCE THAT WE'RE GOING TO NEED TO KEEP GOING IN THE FUTURE, WE'RE GOING TO NEED TO KEEP GOING IN JULY. BUT I THINK IT'S -- >> TIM, WHAT IF IT'S A SCARY STORY THAT WE START GETTING TOMORROW >> I KNOW. >> RIGHT, AND THEN THE FED'S GOT TO HIKE SOONER >> I THINK THAT CREATES A PROBLEM FOR THEM AND THAT'S GOING TO CREATE SOME OPTIONALITY FOR THE HAWKS TO MOVE A LITTLE BIT MORE AGGRESSIVELY, BUT YOU KNOW, THOSE OUTSIDE CASES, YOU KNOW, I THINK THAT'S GOING TO
