Economics
Markets Are Wrong on Fed Rate Hikes, Morgan Stanley’s Caron Says
- Hiking cycles are not sufficiently priced in: Jim Caron
- Fed-dated swaps pricing terminal rate of 4.87% for May
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Markets aren’t prepared for how far US central bankers are willing to go to tame the hottest inflation in a generation, according to Morgan Stanley Investment Management’s Jim Caron.
Even though Federal Reserve officials are predicting raising interest rates above 5% next year, traders continue to underprice the future path of policy tightening, the asset manager’s chief fixed-income strategist said in a Bloomberg TV interview Wednesday.