Hawks in the Ascendancy
by AIB Treasury Economic Research Unit
- 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.
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