Bank of England, ECB, Fed Policy Decisions: Macro Matters

The market interpreting comments following the Bank of England’s 25-bp rate increase at the May policy meeting doesn’t square with the view of Bloomberg Intelligence European Interest Rate Strategist Huw Worthington. On this Macro Matter’s edition of the FICC Focus podcast, Worthington suggests that the UK’s rate-hiking cycle may be nearing an end, while the European Central Bank could raise somewhat further. He notes that quantitative tightening via asset runoff by the ECB is just beginning at full force. Recent credit-rating actions on France might have implications for reviews of Italy and could affect markets.

BI US Interest Rate Strategist Ira Jersey also speaks with Chief US Economist for Bloomberg Economics Anna Wong about recent inflation data and the Federal Reserve’s policy actions last week. She discusses her view of the economy and inflation — highlighting the risk that inflation doesn’t fall aggressively — and the Fed remaining on hold for longer than the market is pricing.