Report
Fed keeps all options open
The Fed was particularly hawkish at its last monetary meeting, with Jerome Powell preparing the markets for a hike in key rates in March and a rapid shrinking of the Fed’s balance sheet. During the questions session, however, Powell did not rule out the possibility of raising key rates more than expected by the market, or even by 50bp at the next monetary meetings, thereby leaving the markets unclear as to the Fed’s next steps. Since then, the market has priced in 5 rate hikes this year and the uncertainty about the pace and magnitude of the rate hikes has kept all financial assets volatile. Volatility will remain high in the short term, at least until the next US inflation figures are released. Against this backdrop, the ECB’s very accommodative stance will become increasingly difficult to maintain in the future.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
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