0.75% hike by the Fed, no bluff

NAB Morning Call

Thursday 22nd September 2022

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No surprise, the Fed has lifted rates by 75 basis points. NAB’s Gav Friend says the response in the bond markets was a reaction to the dot plots, which suggest rates will be at 4.4% by the end of the year, 4.6% next year and 3.8% in mid-2024. They all represent a considerable increase in the numbers given back in June. The Bank of England meets later and, although markets are expecting a 75-basis point hike there too, its unlikely to happen as inflation could well be tamed by a high level of government support for fuel costs. In other news, Putin has called up 300 thousand reserves and threatened the use of all resources, even nuclear, if the west attacks territories deemed by referendums to be part of Russia. No bluff, he said. We look at what impact this will have on market sentiment.

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