• Bond markets are signaling a resilient economy and higher expected inflation.
• Most of the recent move higher in bond yields reflects a higher expected neutral rate.
• Wanted to remove the Fed’s “easing bias.”
• Reducing the banking system’s demand for reserves would provide a smoother path toward a smaller Fed balance sheet than shrinking reserve supply.
• The possibility that we would consider an interest rate increase is greater than zero
• Fed Chairman wash will be asking profound and deep questions about how Fed operates, and that is refreshing

Overall tone: More hawkish. The comments emphasized resilient growth, rising inflation expectations, and a preference to remove easing bias, all of which lean toward keeping policy restrictive for longer.

This article was written by Greg Michalowski at investinglive.com.