Why do so many expect the Fed to slow down?
The reaction from bond markets overnight is more than the data would imply says NAB’s Skye Masters, as investors still cling to the hope of a slowdown from the Fed. But why would it happen?
NAB Morning Call · NAB - The Morning Call
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Show Notes
Wednesday 26th October 2022
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Equity markets and bonds have both rallied overnight, pushing yields lower again. NAB’s Skye Masters says investors are still hoping that the Fed will slow down the path of rate hikes, although there’s no data top suggest why they should and some commentators suggesting that rates might go up above 5 percent early next year. Italy’s new PM is opposed to hikes and an end to QE, warning of the impacts it’ll have on high debt economies, like Italy, for example. That’s unlikely to stop the ECB lifting rates by 75 basis points, which is what the Bank of Canada is expected to do tonight. We also take a look at yesterday’s budget and ask will it help combat inflation, or is the expectation that the RBA will do all the heavy lifting?
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