Traders Diverge from way and BOE on Interest Rate Hikes
· Business · Bloomberg, MarketWatch
Money markets in Europe have turned more hawkish as traders diverge from central bankers regarding interest rate paths. A surge in energy prices has revived concerns about inflation. Swaps now imply four additional quarter-point rate rises from the European Central Bank over the next 12 months. Meanwhile, expectations for the Bank of England suggest five such increases.
Why it matters
The disconnect between market expectations and central bank guidance creates volatility in European financial markets as energy costs pressure inflation targets.
Read the original report — Bloomberg
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