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.
Executive Summary:
- The bank undertook another ‘single’ hike of 25bps in December, raising rates to 2.75%
- Accompanying policy statement acknowledged the need for further tightening going forward
- Lower terminal rate suggests an extra 25bps cut as part of post-peak easing cycle
Full review including summary of sell-side analyst views here:
December’s statement retained the caution around inflation, with the committee assessing that higher rates are still required to dampen price pressures going forward. One notable change to the statement is the shift to the phrasing around the next hike. The bank had highlighted specific meetings at which rates would rise throughout the 2022 hiking cycle, but the wording has now changed to “policy rate will most likely be raised further in the first quarter of next year”.
This, twinned with Bache’s comments that the bank envisage that the “policy rate will be around 3 percent next year” suggests the peak rate could top out at 3.00% after a final 25bps hike in January or March. Path projections, however, are a touch more hawkish and factor in a strong possibility of 3.25% rates at some point in 2023.
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.