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Deutsche Bank sees 3 straight Fed hikes after hot CPI, adding a January move
What happened
Deutsche Bank revised its Federal Reserve forecast to three consecutive 25bp rate hikes — in December 2026, January 2027 and March 2027 — adding a January move to its previous December-and-March path with a pause in between. The bank said the revision followed October CPI, which rose 0.4% month-on-month against a 0.3% consensus forecast, with broad-based price gains. Three quarter-point hikes would lift the federal funds target range to 4.50%-4.75%, from 3.75%-4.00% now. Deutsche Bank also said it would not rule out a 50bp December hike after Fed Governor Waller floated the idea, though a half-point move is not its base case.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected
- Broad U.S. equities — a faster, no-pause hiking sequence pressures rate-sensitive growth and AI stocks already under strain from the Nvidia probe-driven selloff
- Treasury yields near 5% raise the discount rate on richly valued tech. Dollar-positive (USD/JPY pressed toward 160). Gold has slipped back below $4,000/oz on higher-rate expectations.
Sources