Market pricing of rate cuts looks quite aggressive, even if peak rates have not been maintained for particularly long in history either. We think central banks will have to keep rates at a high level for longer than the markets are pricing in. “Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time. In view of the persistent and unacceptably high level of inflation, several participants commented that historical experience cautioned against ... (full story)