Bank of America Global Research on why they expect 75bp of Fed hikes this year despite client pushback.

"We've gotten a good deal of client pushback on our call for 75bp of Fed hikes this year, starting in September. In this piece we lay out some of the arguments we have heard, and explain why we disagree. These arguments can be broken out into three categories: i) "The Fed shouldn't hike," ii) "The Fed should hike but it won't", and iii) "The Fed might hike but 75bp is too much"," BofA notes.

"Some clients think the Fed shouldn't hike because inflation is being driven by one-offs. Per our math, however, underlying inflation is well above target. Some have argued that Warsh will use the task forces as an excuse to not hike. We think he has strategic reasons to hike soon: he'd gain credibility without having to own the inflation problem. Is 75bp too much? Markets are already pricing nearly 50bp of hikes so it would take at least 75bp to deliver meaningful financial tightening," BofA adds.