Note from our good friends at Nordea:
In response to rampaging US inflation, we now expect the Fed to hike rates four times this year followed by another four in 2023. We see more upside for long yields and expect EUR/USD to bottom by the end of the year.
The Fed is turning more hawkish by the day, and for good reason, as US inflation pressures are strong and persistent and will increasingly be reflected in the labour market as well. The ECB will feel some heat as well, but likely more so only next year. Against this background, we expect:
