📝Doubt Fed Will Deliver On Market Pricing: ING

Housing is still running hot, rising 0.6% MoM, but we know that the relationship with housing rents data means this will slow meaningfully in coming months.

The market pricing around the possibility of a rate hike by December has increased marginally, but we doubt it will happen. Fed officials have been emphasising the importance of the increase in Treasury yields as a factor that will tighten financial conditions and reduce the need for another rate hike. With mortgage rates at 23- year highs and credit card borrowing costs at all-time highs, monetary policy looks restrictive enough. Moreover, with corporate pricing surveys, such as in the NFIB small business optimism report, pointing to a gradual softening ahead, we see inflation continuing to moderate slowly over the next couple of quarters.

- ING