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Economist Weekly Market View
- The recent moves in US rates and the dollar highlight a growing divergence between the Fed and markets, amid signs of division on the rate-setting FOMC
- Amidst the uncertainty, markets have moved materially ahead of the Fed’s current dots, pricing in a Fed funds rate at 3.1% by end-2026, compared to an FOMC median projection of 3.6%, and US Treasury yields are 10-15bps lower on the week.
- While markets are focused on downside risks for the dollar, it is also worth noting the upsides.
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