Fed: March squarely on the table - ANZ

According to the analysts at ANZ, with green lights everywhere from the economic perspective in the US, market pricing for another Fed hike on 15 March leapt from a tad over 50% to about 80%.

Key Quotes

“President Trump stuck to the script in his first speech to Congress yesterday, promising deregulation, tax cuts and higher infrastructure spending without any of those pesky details that could spoil the fun. US data was unequivocally strong, and PCE deflator inflation is more or less at target highs.”

“The fact that higher rates could be tough on an economy – and a Government – that is very heavily indebted didn’t seem to feature in the market response, with equities jumping around 1½% to fresh record highs. The Dow Jones Industrial Average is up 6% in a month and 18% since early November (25% y/y).”