Fed up and the fight ain’t over

Thursday 2nd February 2022

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In the US the Fed has announced the expected 25 basis point rate hike, but this year’s prevalent hope of a soft landing seems to have diminished somewhat. The US ISM manufacturing number was lower than expected, whilst the ADP employment numbers showed less jobs, alongside more job openings in the latest JOLTs numbers. NAB’s David de Garis is asked whether that all points to an environment where inflation falls more slowly. Certainly, core inflation is holding up more than expected in Europe and data from Zealand yesterday showed that labour costs there are still high. So, central banks will think they still have much to do, which will be evidenced by 50bp rises by the ECB and Bank of England over the next 24 hours.

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