Welcome to Economic Monitor – a quarterly publication where we explore the key themes shaping the global economy. In this issue, we examine the hawkish turn in the US Federal Reserve’s communications and ask: how high will US interest rates go?
- The market now expects seven US interest rate rises in 2022, with a further two by the end of 2024.
- Current labour market conditions are much tighter and inflation is much higher than the 2000s and 2010s hiking cycles.
- While the Fed may have been late in realising that it was time to take the monetary punchbowl away, we believe markets are still somewhat too relaxed about the extent to which the Fed mean it this time.
Read and download the Q1 2022 edition of Economic Monitor here.