Rate Hiking Cycle Is Far From Over

Despite the reopening of the Strait of Hormuz, structural inflation and resilient labor markets suggest the global interest-rate hiking cycle has further to run. The US Federal Reserve faces the greatest risk of falling behind the curve, potentially causing market volatility in 2027.

Key Takeaways

• 1.Global interest-rate hiking cycles are not over, with central banks facing persistent inflation and resilient labour markets despite the reopening of the Strait of Hormuz.
• 2.The US Fed is at risk of falling behind the curve and may end up hiking more than the current market consensus expects in 2027.
• 3.The AI boom is not necessarily immune to rate hikes; cumulative debt issuance for tech projects is rising, making the sector more sensitive to rising capital costs by 2027.

Table of Contents

• Macro Picture
• Monetary Pivot
• Who Will Hike The Most?
• Rate Sensitivities

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