The Fed wants 2 percent inflation. That means zero rate cuts for Biden reelection.

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The Fed might have to self-induce a recession if it wants to reach its target inflation rate, a BMO strategist said.

Ian Lyngen told Bloomberg TV that the Fed might find its current monetary policy to not be restrictive enough.

Markets have given up hope for a rate cut in June following the recent CPI print.

The latest inflation report not only sent bond yields soaring and stocks plunging, it may also have put the US back on track for a recession, one economist told Bloomberg TV on Thursday. The catch: such a downturn would be one self-induced by the Federal Reserve.

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“If we continue to get inflation prints at these levels, the [Federal Reserve] is going to find itself backed into a corner where they need to cause a recession if they’re going to hold that 2% inflation target,” Ian Lyngen, BMO Capital Markets head of US rates strategy, said.

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Oil spikes to highest level in 7 months.

Oil surged as much as 3% before paring gains on Friday on reports that Israel is preparing for an imminent attack on government targets from Iran as soon as Saturday.

West Texas Intermediate (CL=F) futures rose to October highs before settling at $85.66 per barrel, while Brent (BZ=F), the international benchmark price, settled just above $90.45 per barrel.

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