The Fed's Chris Waller tossed a hawkish grenade into money markets early yesterday with his threat to vote for a 50bp rate hike at the 9 December FOMC meeting. He conditioned this on the October CPI data coming in hot for the third month in a row, which it subsequently did. The comments and the CPI print contributed to a 20bp rise in short-dated Treasury yields and a 7bp flattening in the 2-10 year curve. The case is increasingly building for the Fed to take rates into restrictive territory to slow aggregate demand and bring inflation back to target. That has been the stated aim of Fed Chair Kevin Warsh since his ... (full story)