The market is now discounting three rate hikes in 2022, with lift-off to begin in March. Here is how the Fed turned hawkish.
The full post can be found here.
Don't fight the (hawkish) Fed
January 01, 2022 at 13:51 PM EST
As the S&P 500 rises to fresh all-time highs, an important risk is lurking in the form of a more hawkish Fed. Inflation is running hot. When the Fed was officially in the transitory camp earlier this year, inflation pressures were concentrated in only a few components such as used cars. Today, price increases are broadening and even core sticky price CPI (red line) is rising strongly. As a consequence, the Fed made its hawkish pivot and signaled that it is on pace to end its QE program by March 2022, even though inflation expectations (black line) remain well-anchored.
The market is now discounting three rate hikes in 2022, with lift-off to begin in March. Here is how the Fed turned hawkish.
The full post can be found here.
The market is now discounting three rate hikes in 2022, with lift-off to begin in March. Here is how the Fed turned hawkish.
The full post can be found here.
