Deutsche Bank researchers compiled historical inflation data from 50 developed- and emerging-market countries. If their median inflation outcome turns out correct, “then the turbulence of 2022 could prove to be just the beginning.”
Five times in the past year, investors and traders hoped the Federal Reserve would shift to an easier policy stance at some point and were wrong. While it remains to be seen what happens this time, inflation’s historical record suggests financial markets, policy makers and forecasters are still much too sanguine.
Read: Here are the 5 times traders and stock-market investors got fooled by Fed ‘pivot’ hopes in past year Meanwhile, the definition of a Fed “pivot” has changed over the past 12 months. Last November, at a time when major central banks had yet to start tightening, a pivot was considered to be a later-than-expected “liftoff” or initial rate hike during 2022. Now that the Fed has delivered three straight hikes of three-quarters of a percentage point each since June, and a fourth is all but certain on Nov. 2, the definition of a “pivot” has evolved to mean a shift away from that increment.