Sustained pressure on the Fed to maintain its current restrictive stance of 25 bps hikes
26 January 2023
Mixed messaging from the US on growth today. While the overall economy expanded by an annualised rate of 2.9% in the fourth quarter (compared to a 3.2% gain the previous quarter) which was ahead of expectations, consumer demand was weaker than expected, reflective of the now higher interest rate burden on the US consumer. So, a GDP print that is backward looking, coupled with what must be a weaker consumer picture going forward, despite a relatively strong jobs market. Unfortunately for bond investors (and equity investors to a degree), it sustains the pressure on the Federal Reserve to maintain its current restrictive stance of 25 bps hikes for the next few meetings at least.Important legal information
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