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[Bloomberg]( Hawkish Fed moves markets, a raft of monetary action, and claims data due. Dot plotting The Federal Reserve is signaling a faster-than-expected pace of policy tightening. Yesterday’s dot plot suggested two rate hikes by the end of 2023 and Chair Jerome Powell said it was the “[talking-about-talking-about meeting](” in reference to the discussion on tapering. There also seemed to be some uncertainty creeping in as to how temporary the rise in inflation will be with Powell admitting there is a risk it will prove [higher than policy makers think](. The action the bank did take yesterday was to raise by 5 basis points the rate on its overnight reverse repurchase-agreement facility and the interest paid on excess reserves, amid the [growing dollar glut in short-term funding markets](. Moving lower The slightly more hawkish-than-expected Fed decision pushed global equity markets a bit lower with Europe’s Stoxx 600 Index [falling this morning for the first time in 10 days](. S&P 500 futures also point to more losses at the open, with Asia posting its biggest slide in a month overnight. The big story is one of dollar strength, which has led to another move down in [gold]( after its plunge yesterday while the Bloomberg Commodity Index has slumped more than 2% from its pre-Fed level. The 10-year Treasury yield was at 1.565%. Not the only game in town While the Fed dominates the headlines today, there’s plenty more to digest from central banks around the world. European Central Bank chief economist Philip Lane, speaking to Bloomberg television, signaled that the bank [may keep stimulus in place]( longer than many expect. Norway’s monetary authority is preparing a [series of quarterly interest rate hikes]( from September, while the Swiss National Bank kept its [ultra-loose policy stance in place](. There’s no rate move expected from the [Turkish central bank decision]( at 7:00 a.m. Eastern Time. Brazil saw the expected 75 basis point rate hike yesterday and policy makers [opened the door to even bigger increases]( as inflation forecasts surge. Claims Back in the U.S., today’s weekly jobless claims figure is expected to show continued improvement, with the number of new people signing on for benefits forecast to drop to 360,000. Powell reiterated yesterday that the Federal Reserve remains some distance from its policy goal of “[substantial further progress](” while expressing confidence that the U.S. economy is on the path to “a labor market that shows low unemployment, high participation, rising wages for people across the spectrum.” Continuing claims are expected to drop to 3.425 million with the data released at 8:30 a.m. Coming up... As well as that claims data, we also get the latest Philadelphia Fed Business Outlook at 8:30 a.m. The U.S. Leading Index for May is at 10:00 a.m. Treasury Secretary Janet Yellen appears before the House Ways and Means committee on President Joe Biden’s budget. The SEC may issue its decision on a Bitcoin ETF. Adobe Inc. is among the companies reporting results.  What we've been reading Here's what caught our eye over the last 24 hours. - Odd Lots: Why Ram Parameswaran says the world’s biggest tech stocks are [ridiculously cheap right now](.  - What [pandemic puppies]( can tell us about supply shortages. - The commodities boom is luring criminals to make [bigger and bolder scores](. - Trade war costs global value chains [3-5 years of growth](, UN says. - Bitcoin beach: what happened when and El Salvador surf town [went full crypto](. - U.S. Open tennis to [allow 100% fan capacity](. - Yep, fusion reactors are still [just around the corner](. And finally, here’s what Joe’s interested in this morning Stocks fell and bond yields rose after the Fed came out [yesterday and penciled in an expected two rate hikes in 2023](. Of course as Powell has repeatedly noted, the dot plot is just a collection of different people's opinions about the likely pace of policy, and not a unified policy statement. Nonetheless it seemed to move markets. What struck me during the press conference is how Powell sees the risks to the economy. Powell is an optimist. He was an optimist long before the crisis, actually, expressing the view that unemployment could continue to fall without necessarily triggering an unpleasant rise in inflation. The new Fed framework of waiting to see actual realized inflation could be seen as a formalized approach to that optimism. Nonetheless, when it comes to the risks right now it's clear he's more worried about an inflation overshoot than he is about employment. In his first answer at the press conference, in response to a question from the [Washington Post's Rachel Siegel](, he sounded unambiguously confident that the economy will return to a state of low unemployment and that whatever issues we're facing now with slow Non-Farm Payroll growth are the result of temporary factors, such as ongoing fears of the virus, lack of childcare and possibly the UI expansion. Here's Powell: So I would say if you look at the labor market and you look at the -- the demand for workers and the level of job creation and think ahead, I think it's clear, and I am confident that we are on a path to a very strong labor market, a labor market that -- that shows low unemployment, high participation, rising wages for people across the spectrum. I mean, I -- I think that's -- that's shown in our projections. It's shown in outside projections, and I -- if you look through the current timeframe and think one and two years out, we're going to be looking at a very, very strong labor market. In terms of exactly what that means, we'll -- we'll have to see how things evolve. I think we learned during the course of the last very long expansion, the longest in our history, that labor supply during a long expansion can exceed expectations, can move above its estimated trend, and -- and I have no reason to think that that won't happen again.  At other times throughout the press conference he reiterated this view. On the jobs front, he's just not worried. He's aware that the labor market isn't healed, but we'll get there. Powell is also optimistic about inflation. He cited various transitory factors -- supply chains and such -- to explain the current upward pressure. And he even cited the recent tumble in lumber prices as evidence that markets work and self correct. But he clearly sees some possibility that inflation could become problematic if the current elevated inflation levels change people's expectations. Later in the press conference, after explaining why he thinks inflation will prove transitory he added this caveat: ...we don't in any way dismiss the chance that it can work out that -- that this goes on longer than expected and the risk would be that over time it does begin to affect inflation expectations. And if we see inflation expectations and inflation or -- or inflation moving up in a way that is really materially above what we -- what we would see is consistent with our goals and persistently so, we wouldn't hesitate to use our tools to address that. That's if price stability is happening are mandated and we would certainly do that. Overall, Powell is optimistic that unemployment will rapidly come down along with inflation. But of the two, he (and it would appear along with many other members of the FOMC) is edging more towards monitoring the risk of inflation becoming problematic than the risk of the labor market running out of steam before full employment goals are met. Joe Weisenthal is an editor at Bloomberg Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022