WOOD Flash – EME Macro/Strategy: US macro – may be heading for 6% rates and recession
The FOMC at the Fed has raised the federal funds rate by 75bps, to 3-3.25%, in line with expectations, but also delivered a very hawkish comment, signalling that the FOMC will aim to bring real rates into positive territory as a core objective of bringing inflation in line with the target. If this strategy is observed, there are severe upside risks for the policy rate outlook and the US will enter a significant recession next year. The new dot plot shows that interest rates will continue to rise in 2023E, in the view of the majority of the FOMC members, and plausibly fall in 2024E. This is a slower turnaround than what we expected based on the ongoing, albeit small, softening of the labour market and the historical pattern of the Fed.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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