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Jumbo Christmas Present
- This week’s US inflation data and comments by a senior central banker have raised the risk of a ‘jumbo’ 50bps rate hike at the final Fed meeting of the year on December 9th.
- Adding a hostage to fortune, speaking before the release, Fed Governor Christopher Waller stated that “a 50bps hike in the policy rate should be considered” in December if the core rate increased by 0.3% or more.
- Meanwhile UK rate expectations also firmed, but to a lesser extent this week, following hawkish remarks from BoE Deputy Governor Clare Lombardelli, who refused to rule out back-to-back rate hikes.
- Indeed, the much talked about second-round effects have yet to materialise to any great extent in the Eurozone and the UK.
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