Archive

December 01, 2025
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HEM: Dec-25 Views & Challenges

  • Volatile markets and policy guidance washed out, with pricing and forecasts little changed on the month.
  • Bailey is biased to ease, but the BoE is awakening to its inflation problem. It should cut less than dovishly priced.
  • Higher unemployment could move beyond a structural shift from policy to signal a less elevated neutral rate.
November 03, 2025
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HEM: Nov-25 Views & Challenges

  • Pushback by Powell and peers trimmed some excessively dovish pricing, but the BoE converged down on poor data.
  • The BoE should also resist pressure as underlying issues are unbroken by relatively marginal recent payback.
  • We now see markets overpricing easing most in the UK. More weakness is needed to signal a threatening trend.
October 06, 2025
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HEM: Oct-25 Views & Challenges

  • Hawkish inflation and policy rate pricing shifts toward our UK/EA view did not stop US rates frontloading more cuts.
  • We still see markets overpricing easing, with UK inflation expectations stuck above target, and neutral rates high.
  • A break in activity data, especially unemployment, and underlying price/wage inflation, would threaten our view.
September 01, 2025
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HEM: Politicised Policy Pricing

  • Persistent inflationary pressures pared dovish guidance and pricing for the BoE and ECB, but Fed pricing is stuck.
  • Blocking a rare resumption of Fed easing looks unlikely, but history suggests cuts would be shallow and reversed.
  • Peer pressure is weak during a policy mistake. The BoE faces domestic problems that prevent further easing.

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