Archive

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.
August 04, 2025
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HEM: One-Touch Easing

  • Payrolls revisions challenge the rolling resilience seen in most other hard data releases, but seem over-weighted.
  • Underlying price and wage inflation mostly track >2%, especially in the UK, which doesn’t need more rate cuts.
  • Policymakers biased to ease will deliver it on a batch of bad outcomes, even if the evidence proves fleeting.
July 07, 2025
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HEM: Rolling Resilience

  • Activity remains resilient, and labour markets are tight
  • Underlying price and wage inflation mostly track >2%
  • Doves assume this regime breaks, but it isn’t happening
  • Cuts can keep rolling later and may never materialise
  • Rate hikes are more historically usual after pausing

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