The Fed is likely not done yet

The Fed has recently slowed its pace of rate hikes in order to allow the central bank better to respond to incoming data. However, the economic data we received so far this year has been stronger than expected. Growth is rebounding, the labour market remains exceptionally strong and inflation is not coming down as quickly as initially thought.

The Fed is data dependent and the economic data we’ve received so far this year won’t help them to stop hiking. I believe the terminal rate will have to be revised higher and it will likely end up being closer to 6% than to 5%.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Carlo Putti

Job Title: Investment Director

Specialist Subjects: Macroeconomics and IG credit

Likes: MotoGP, Football and Italian pizza

Heroes: Valentino Rossi, Steve Jobs and Donald Duck

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