Hawkish central banks have sent a resounding "no" to markets betting recession would force rate cuts soon, leaving money managers scrambling for direction as the second half of the year approaches. The U.S. Federal Reserve on Wednesday paused its most aggressive rate hiking cycle in decades, but signaled that borrowing costs will likely rise by another half of a percentage point by year-end given sticky inflation. The European Central Bank followed on Thursday, leaving the door open to more rate hikes as it flagged risks from rising wages and revised up its inflation projections, sending euro zone bond yields surging.
Hawkish central banks have sent a resounding "no" to markets betting recession would force rate cuts soon, leaving money managers scrambling for direction as the second half of the year approaches.