“Sell everything but the dollar” is resounding across trading desks as investors reprice the risk that the Federal Reserve hikes interest rates more aggressively than previously thought.
A global wipeout sparked by faster-than-forecast US inflation gathered pace on Monday amid a dramatic shift in bets on the pace of increases. Traders now see the Fed jacking up borrowing costs by 175 basis points by its September decision, which would mean at least one 75 basis-point move. More aggressive tightening is also seen at the European Central Bank.
