14 December 2022
If you are covering the latest monetary policy announcement from the Federal Reserve, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
"Despite inflation coming in cooler than expected on Tuesday, the Federal Reserve has stuck to its guns and, as was expected prior to the inflation print, raised interest rates by 50bps today. This brings to an end successive 75bps rate hikes and will buoy some investors who may see this as a signal of a corner turned in the fight against inflation. The Fed clearly has confidence in its aggressive stance and feels it is working but won’t want to let off the pedal yet. Markets may be thinking a soft landing will be achieved and that a pause or a pivot back to looser monetary conditions could soon return, but the Fed’s hawkishness won’t simply end on one piece of good news.
“Inflation may be heading back down, but it is still very much present in the system. Indeed, service inflation remains a concern and will become the next key metric to watch. Despite the positive news, there is still a great deal of uncertainty over the future of the economy and the direction of interest rates."
