The Strategist

Analysts: The Fed does not intend to change its stance on rate hikes



03/07/2022 - 03:31



US stock markets closed at the end of the week in the red zone. The conflict in Ukraine, imposition of sanctions and counter-sanctions, as well as suspension of operations of a significant number of companies in Russia forced investors to reconsider their forecasts.



Ken Lund
Ken Lund
Geopolitical risks are a serious driver for commodity prices. Energy, metal and agricultural commodity prices are hitting all-time records on a daily basis with the start of action in Ukraine.

The Fed intends to follow its tough rhetoric on rate hikes. According to the statements of the regulator's head Jerome Powell, the Fed will promptly respond to changes in economic conditions, the planned rate hike in March is 25 bps. 

After Powell's statements the trend of Treasury yields has turned upwards. However, some macroeconomists have become less conservative about the pace of rate hikes amid a potential global economic slowdown due to geopolitical tensions.

Investors will continue to monitor geopolitics and assess the extent to which European banks are dependent on the Russian financial system.

Important macrostatistics to be released during the week include German retail sales, EU GDP, industrial production in Germany, UK and EU, inflation in China, US, Germany and France, as well as the ECB interest rate decision.

source: cnn.com




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