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Hard to see more than another 75bp of hikes from here

  • Based on that at first take, the MNI Markets team is far from convinced the MPC will hike in December. Maybe 50bp in Sep, 25bp in Nov then stop (cumulatively another 75bp). Markets are still looking for 120bp more by March - that seems too high to us.
  • Neutral rate is thought to be around 2.00%. Another 75bp from here would put us 50bp above that level (some even consider the neutral rate lower). The bar to hiking more will be higher when we pass the neutral rate, particularly with those MPR 3-year inflation forecasts...

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