Indosuez Wealth Management Says Markets May Be Overpricing Fed and ECB Rate Hikes

Indosuez Wealth Management said markets are pricing in a more hawkish path for Federal Reserve and European Central Bank rates than the firm’s baseline scenario. According to Odaily, strategists Lucas Merrick and portfolio manager Alexander Bell expect steady economic growth and gradually normalizing inflation to limit the scope for further monetary tightening. The two said it could take time for enough data on moderate underlying inflation and economic growth to support that outlook, and that bond markets would remain volatile in the meantime. Money markets currently expect about 1.5 Federal Reserve rate hikes and two European Central Bank hikes over the next 12 months.