February 2023 | At its February meeting, the US Federal Reserve slowed the pace of rate hikes for the second consecutive meeting from 50bp to 25bp, moving the Fed funds target rate to 4.50-4.75%. We think the tight labor report and signs of sticky wages means the US Federal Reserve will likely continue its tightening cycle beyond the March meeting.
01 | The Federal Open Market Committee (FOMC) said it will consider cumulative tightening and economic data on growth and inflation when making future decisions.
02 | We believe volatility will remain high as markets assess labour markets and inflation and their effects on the Fed's future rate hiking path.
03 | The latest employment data were much stronger than expected by the markets, indicating that the US is not close to a recession.
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