Yesterday’s release of the minutes of the Fed’s meeting conveyed growing support for slowing interest rate hikes in response to data suggesting cooling inflation. On similar lines, Kansas City Fed President Esther George said in an interview last week, “When I think about inflation today, we’ve kind of turned the tide of supply-chain, production-side shortages.”
Hence, stocks rallied globally on hopes of a transition in the Fed’s hawkish stance, beginning with a downshift to a 50-basis-point rate hike next month. This would be a welcome break after persistent sell-offs triggered by four consecutive 75-basis-point rate hikes took the wind out of the sails of the market and the economy.
