SocGen on Fed Policy: Four More 25Bp Hikes in 2023

Subadra Rajappa, Head of U.S. Rates Strategy at Societe Generale says market are "now expecting nearly four more 25bp hikes this year. Inflation will remain the key focus for global central banks.

• That said, Rajappa cautions the "more the Fed hikes the higher the probability of a hard landing, which explains why the market is still expecting a policy pivot – although the timing has been pushed out to later this year."
  
• "In this context, we believe risks are asymmetrically skewed toward lower yields (though timing the inflection point will remain tricky). We would view the 10yT yield returning to near 4% as an opportunity to leg into longs if you can weather a potential overshoot over the near term."