Some (Don’t) Like It Hot
February 04, 2023
What’s up with this economy? Just as hopes were rising of a soft landing – with inflation declining as the economy gently cools – Friday’s jobs data showed the labor market is still very hot. Markets did not like the news, anticipating higher interest rates for longer than had previously been priced in. The reset of expectations may please monetary policymakers. All three major central banks raised their policy rates this week, and all three promised further hikes to come.