Despite a headline disappointment, upward revisions, the fall in the unemployment rate and the surge in average hourly earnings would appear to give the green light for a Fed rate hike in March. Headline and core CPI inflation is likely to print another peak on a y/y% basis. We expect it will moderate over the year. Even so, the Fed is going to hike rates and there seems to be a bias towards more hikes than fewer. That is the view of Isaac Poole from Oreana who joined ausbiz for his take on the current economic climate. When it comes to rates, the brutal moves in the long end were driven by the real yield. The Fed will want the real yield to normalize back towards zero percent, or a little bit positive, but I think that needs to happen gradually. A 110bps sell off over a quarter will be a challenge for markets and the economy to digest says Isaac. Find out his thoughts on equity markets heading into 2022. (Source: Ausbiz)
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