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The catch, of course, was wording in the accompanying statement to the effect that this may not be the end to the interest rate hiking cycle.
The ECB does need to make policy for the eurozone as a whole, but perhaps it should consider combining a rate hiking cycle for the core with greater realism in terms of the approach for the weakest peripheral countries.
Today, there are a few things that separate the U.S. from traditional hiking cycles – and we note per our above chart that we really have not had a hiking cycle since the early 1980s – we have merely had successive easing cycles, each going further than the last.
The combination of the previous week's GDP report and Friday's employment data have taken the odds well below 50/50 that the FOMC will raise rates another 25 basis points, giving just reward to the "one-and-done" crowd and all others who have anticipated the end of the hiking cycle since early 2006.
When you think about it, the financial sector retreat seems a bit surprising, especially considering that the Fed remains in a hiking cycle (higher rates tend to help banks), M&A activity is high, and the economy continues to grow near 3%.
He held up an edition of the New York Times from 1942, when the outcome of World War II was still unclear (Much tougher times than today's uncertainty about the Fed's rate hiking cycle).
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The patient walked, hiked, cycled and ran after 6 months and returned to alpine skiing after 10 months, as an active, healthy, 70-year-old man can do.
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