Equities | Europe | Monetary Policy & Inflation | US
Markets to Watch This Week: Fed and ECB Hawkishness to be Confirmed
- By Bilal Hafeez and Ben Ford
- 3 min read
Market Moves
Hawkish rhetoric returned to marketmarket expects. Chair Jerome Powell was not the only hawkish member of the committee last week; Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester noted interest rates could be hemarket expects. Chair Jerome Powell was not the only hawkish member of the committee last week; Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester noted interest rates could be held above 4% – higher than the current market implied terminal rate (3.85%). Limelight was stolen by the week’s end; the European Central Bank’s (ECB) Robert Holzmann called for 75bp to be ‘part of debate’ come September (when just 50bp was priced) while ECB Board Member Isabel Schnabel followed with equally hawkish rhetoric. ECB Chief Economist Philip Lane, however, was (as expected) more dovish calling for a softer hiking cycle, but we take that to mean 50bp, not 25bp.
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