STORY: Markets are pricing in a near certainty that the Fed will hold rates steady at the central bank's upcoming meeting, according to the CME Group.
Mahn said while the recent surge in oil prices will not be factored into this week's CPI and PCE reports, they will certainly be on the Federal Reserve's mind as they meet next week.
Analysts now expect the first interest rate cut to take place no earlier than July, while Mahn believes it may occur a bit earlier in June after Kevin Warsh takes over as Fed Chair in May.
Mahn says if energy prices stay elevated, inflation could re-accelerate just as the labor market is softening - a scenario he believes will limit the Fed's ability to respond to either problem effectively.
