Time for a Change in Stance?

| Multi-Asset

Today, market sentiment seems to be focusing on the data that supports Fed rhetoric on the temporary nature of the inflation risk. However, as our chart shows, hawkish voices are emerging among central bankers and there is no longer unanimity on the current level of liquidity injections. Our central bank ‘heartbeat’, which aggregates hawkishness or dovishness over time, started grinding higher a few weeks ago and we believe this is only the beginning. In fact, the disconnect between fundamentals and monetary action is increasing by the day, and we are of the view that the time for a change in stance is coming faster than expected.


Time for a Change in Stance?

Source: Unigestion, Bloomberg, as of 10 June 2021

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