In today’s weekly market review, we tour the major markets to see what happened this week. Overall, the markets are in dip-buying mode, even as inflation roars higher and rate hikes are likely to become more aggressive.
New York Fed president John Williams said that if the central bank needs to raise rates by a half point, it should — reinforcing comments by Fed chairman Jerome Powell and other officials over the past week.
The Fed’s steps to contain inflation are “what ultimately will drive a more aggressive inversion of the curve, which we think is coming quite quickly,” Columbia Threadneedle Investments global head of fixed income Gene Tannuzzo told Bloomberg.
But that doesn’t necessarily signal a recession, since “this is a very different cycle and the first one in over 30 years where the Fed is playing catch-up to inflation,” he added. Despite the strong correlations in the past, as I discussed the other day.
Economists at both Citibank and Bank of America said they now expect the Fed to lift its key rate in multiple 50-basis-point increments.
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