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Fed hawks can’t compete with plunging inflation

This week saw a renewed attempt from some Fed officials to push back against market expectations for interest rate cuts but, with core PCE inflation running at an annualised pace of below 2% over the past six months, this final flurry of hawkishness isn’t fooling anyone. There is mounting evidence that the post-pandemic inflation scare is over and we expect interest rates to be cut significantly next year.

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