Persistently strong core inflation and a surprisingly resilient labor market will have the Fed hiking further - Citi

Citi analyst Andrew Hollenhorst: "Hike or “skip” at the June meeting remains a close call after a 14th consecutive upside surprise to monthly job growth at +339k but an unexpected rise in the unemployment rate to 3.7%. Our base case is for two additional 25bp hikes in June and July. The exact Fed policy path is uncertain and contingent on June 13 core CPI inflation. But one thing is becoming increasingly clear: persistently strong core inflation and a surprisingly resilient labor market will have the Fed hiking further, in our base case to 5.50-5.75%."

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