Markets could be in for more pain in 2023 after central banks re-asserted their inflation fighting credentials this week.
The most striking thing about the Fed is the strong bias among FOMC members to take rates above 5%; ten of the nineteen FOMC members see rates getting to 5.125%, while seven more see rates peaking above this level.
Meanwhile, the very hawkish rhetoric from the ECB caught the markets by surprise.
Central banks are clear that they will stay the course and do what is required to get inflation back down to target.
