The Fed hiked 75 basis points yesterday in what was deemed a hawkish hike. Chairman Powell confirmed it was premature to discuss pausing interest rate hikes. The greenback soared while stocks sank.
Markets are now positioning for further hikes and, as a result, pushing money into the US dollar. Expectations are for a 50-basis point hike in December and potentially more to follow in 2023.
The Bank of England is up next and markets are forecasting a 75-basis point hike. This may not be GBP positive as raising rates into a weakening economy could exacerbate the underlying issues.
Written by Viv Savani. 8:38am, November 3rd 2022
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