One Global Shock, Different Rate Paths

A shared global energy shock is producing divergent central bank paths, with the Fed, ECB and BOJ all expected to hike less than markets price.

• Fed on track for two more hikes: Michael Gapen expects 75bps total tightening by March, framing it as recalibration against energy-driven second-round inflation, not demand suppression.
• ECB nearly done, BOE lagging: Jens Eisenschmidt sees one more ECB hike in December (maybe one more in March) versus 325bps the market prices in; BOE has more room given its longer restrictive stance.

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