• The Fed continues to raise rates and the hawkish rhetoric is
unchanged, with no indication that the Fed will pivot anytime soon.
Interestingly, post the end of the quarter, the RBA only raised rates
by 0.25% in October, which came as a mild surprise to the market.
• Inflation remains elevated, although we are starting to see some
signs that inflation may be on the way down. Having said that,
Europe, including the U.K. still seems to be struggling with inflation,
in particular energy prices, so inflation remains at or near record
highs. In the U.S., headline inflation came in a little lower than
expected in the August print, but core inflation was higher.
• Unemployment rates remain very low across the developed world
and are inconsistent with a recession scenario just at the moment.
The US unemployment rate fell to 3.5% in September 2022,
matching July’s 29-month low and remaining below market
expectations of 3.7%. This is a clear sign that overall labour market
conditions in the U.S. remain tight.
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