Pictet Wealth: The market may be overreacting to expectations of Fed rate hikes

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ME News, July 28 (UTC+8): Pitt Capital Management said the market’s current pricing for the probability of Fed rate hikes is unusually high. “While we can’t completely rule out the risk of an unexpected rate hike, current market pricing appears to be too high,” said senior U.S. economist Xiao Cui in a report. The latest U.S. inflation data and remarks by Fed officials have reinforced expectations that the Fed this week will keep interest rates unchanged at 3.5%-3.75%, but she said officials continue to view inflation as the more important policy risk, opening the door to tightening as early as September. Cui also believes that Logan and Hammack on the committee may cast dissenting votes in favor of supporting a 25-basis-point rate hike, and Kashkari may also join this camp. (Source: Jinshi)
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