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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Executive summary
- With a rising number of economic and sentiment indicators pricing in a significant deceleration in the economic activity, Fed may disappoint investors this year by delivering less hikes that what the market is currently expecting.
- In addition, declining fundamentals leave US risky assets vulnerable for 2022.
- A less ‘hawkish’ Fed stance leaves room for some USD depreciation this year against EM FX and the Euro.
Link to full analysis:
With the US economy expecting to continue to decelerate, it will be difficult to see 6 to 7 hikes this year, and US policymakers are likely to disappoint the market with less hikes, especially if we start to see market frictions going forward (i.e. another important consolidation in US equities) The chart below shows that a sharp increase in ST rates have historically led to a slowdown in the economic activity.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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