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How distant is the Fed from its inflation objective? Investment Insights • MFN

How distant is the Fed from its inflation objective?

US inflation is falling but the Federal Reserve remains determined to keep raising interest rates. In recent speeches, Chairman Powell focused on the high prices of services ex-housing and their link to wage inflation. In this Macro Flash Note, GianLuigi Mandruzzato analyses the latest data and concludes that the return of inflation to 2% may be closer than the Fed anticipates.

GianLuigi Mandruzzato

4 min read
Bank of England hikes interest rates and gets closer to ending its tightening cycle Investment Insights • MFN

Bank of England hikes interest rates and gets closer to ending its tightening cycle

On 2 February the Bank of England’s Monetary Policy Committee (MPC) voted in favour of a 0.5% interest rate increase to 4.0%. This represented the tenth rate increase since December 2021 as the BoE continues to grapple with high levels of inflation. In the press conference after the meeting, BoE Governor Andrew Bailey stressed that the MPC believes it is still too soon to declare victory over inflation as it remains elevated at 10.5% year-on-year (yoy). However, markets believe the central bank is near the end of its tightening cycle.

Joaquin Thul

6 min read

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