The Next Cycle
by AIB Treasury Economic Research Unit
- The US Fed has opened the door to pausing its rate hiking campaign, following a 25bps rate increase at its latest policy meeting, which brought the funds rate up a 5.0-5.25% range.
- Meanwhile, markets believe that we are approaching the peak in rates in the Eurozone and UK as well.
- A number of points are worth making in this regard. With inflation still high, central banks are indicating that policy will need to be kept tight for some time after rates reach their peak.
- Nonetheless, rate cuts are being priced in everywhere, starting this autumn in the US and early next year in the UK and Eurozone.
- Looking to the week ahead, as mentioned above, it is the turn of the Bank of England to enter the monetary policy spotlight
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