US Rates May Be Heading Higher Than Wall Street or Fed Think
- Strong jobs market, sticky inflation to push rates higher
- Tighter credit raises risk of an eventual US recession
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Last year, most US investors and central bankers underestimated how high inflation would climb. Now they may be underestimating how high interest rates will need to go to bring it back down.
In spite of the Federal Reserve’s most aggressive credit-tightening campaign in four decades, the US economy and financial markets started the new year with a bang. Payrolls surged, retail sales jumped and equity prices soared.