FED, Hamas, ECB discussed on Bloomberg Daybreak: Europe

Automatic TRANSCRIPT

Enough and i think what was previously pricing about the minutes was how balanced activate seemed to be that you had a few members who are concerned that three hikes were not sufficient given how easy financial conditions werbe also had a few members who are worried the three hikes might be too many considering that inflation was still quite modest so we have jerome powell 8 essentially david sort of thinking is going to be a hawkish federal reserve y your your tone seems to suggest you expect more hikes what does that day for the debate about what 10year use go to and how quickly they do rise if the fed rises more aggressively as you intimate so so i think this is one of the parts of our call which i think can seem so what counter counterintuitive but i think we think the fed hikes threetimes next year that's a bit more than the market is still pricing but we think that leads treasury yields to to actually fall modestly by the end of the year and the reason is is we think that decline will be focused at the long end of the curve and so is the fed is raising the front end the curve were flattened because the market will anticipate or assumed that those hikes now now our increasing the odds of a downturn happening eighteen months to 24 months down the line and if that's the case the u s curve should be flatter or should be completely flat and actually yields 10year yields 30year yields at current levels are actually quite well supported the how de european bones then fag not mean vine then and what will ecb action dion tissot pay and hamas did they follow the fed surf of ecb isn't a slightly different position and i think for for two reasons the first is i think the ecb may be more so than the the fed or even the bank of japan has an earlier cycle economy that showing less signs of overheating and we'll have an easier time keeping policy very accommodative in spite of decent growth numbers and so i think that's actually a big structural advantage the europe has on a multiyear viewers.

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