WS #17035
Bank of Japan Governor Ueda has escalated his rhetoric, warning that unconventional monetary policy tools may be required again and acknowledging that energy-related inflation is hitting consumer prices. This dovetailing of hawkish inflation data with dovetailing central bank action has caused global bond markets to react, with December US rate hike odds jumping to the high 70s. The implication is a tightening of global liquidity conditions, which pressures high-multiple growth stocks and emerging market currencies.
BOJ Hawkish Pivot and Global Liquidity
Bank of Japan Governor Ueda has escalated his rhetoric, warning that unconventional monetary policy tools may be required again and acknowledging that energy-related inflation is hitting consumer prices. This dovetailing of hawkish inflation data with dovetailing central bank action has caused global bond markets to react, with December US rate hike odds jumping to the high 70s. The implication is a tightening of global liquidity conditions, which pressures high-multiple growth stocks and emerging market currencies.