Markets Willing to Price In More Fed, ECB Hikes: SocGen's Rajappa

The transcript discusses the peak rates in the current hiking cycle at both the ECB and the Federal Reserve, highlighting the challenges in determining which is more achievable. It emphasizes the efficient market pricing for higher yields and policy adjustments in the US and Europe. The real risk lies in data disappointments, which could lead to lower yields and missed market expectations. The momentum from the fourth quarter and strong first-quarter GDP in the US suggest the market may adjust to more rate hikes from both the Fed and the ECB.

What is the main challenge in determining the achievability of peak rates at the ECB and the Federal Reserve?

• Political instability

• Differences in economic policies

• Uncertainty in market conditions

• Lack of historical data

What is the market's current stance on higher yields and policy adjustments?

• The market is ignoring policy adjustments

• The market is uncertain about future yields

• The market expects lower yields

• The market is efficiently priced for higher yields

What is the risk if the upcoming data disappoints?

• Increased inflation

• A miss in market expectations

• Higher yields than expected

• Stronger economic growth

What is the current momentum in the US economy as discussed in the video?

• Weakening GDP growth

• Strong tracking of first quarter GDP

• Stagnant economic conditions

• Declining market confidence

How is the market expected to react to new data in the near term?

• Ignore the data

• Adjust and price in more hikes

• Expect a decrease in rates

• Maintain current expectations