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Rates Spark: On Tenterhooks


  • As January starts, rates markets remain on tenterhooks, as persistent inflation forces central banks into a tunnel vision-like focus on price dynamics.
  • Both ends of the curve have ratcheted higher in response to the minutes. A flatter curve has also been a notable outcome; rate hikes are coming.
  • Inflation expectations have fallen, which is what would be expected from a more hawkish Fed that is increasingly prepared to act.

Federal Reserve building with twenty dollar bill on grunge texture

Willard/iStock via Getty Images

By Padhraic Garvey, CFA, Benjamin Schroeder, Antoine Bouvet

Market rates take the minutes as a cue to keep motoring higher

Both ends of the curve have ratcheted higher in response to the minutes. A flatter curve

(Source: St. Louis Fed, ING)

(Source: Refinitiv, ING)

This article was written by

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