Recalibration

Inflation levels globally continue to display signs of being well entrenched, especially in the US. The factors contributing to the same seem undeterred even after a spate of interest rate hikes. This has led to a renewed upsurge in the hawkish policy stance of most major central banks. The Central banks of a few large economies have already hiked the benchmark rates in Jun’23 with the expectation of further hikes in July. As the interest rate 'glide path' consistently rises at each policy meeting, it becomes increasingly difficult to predict the eventual terminal rates.