Schroder's de Mello Sees Expectations for Fed Unwind

The video discusses the impact of dot plots on market expectations, focusing on the Fed's balance sheet management and the debate between active and passive approaches. It highlights market expectations for rate hikes and the potential impact of economic growth on these decisions. The video also examines inflation expectations, the bond market, and the influence of oil prices on break-even rates.

What is the main reason for the gap between the dot plots and market pricing?

• The Fed's consistent policy

• High inflation rates

• Expectations of an unwind of the balance sheet

• Stable economic growth

Why is active management of the Fed's balance sheet considered necessary?

• To increase bond maturity

• To maintain control over policy

• To reduce inflation

• To stabilize oil prices

What might cause the Fed to delay rate hikes?

• An increase in oil prices

• A strong economic growth

• A decrease in unemployment

• A wobble in economic growth

What has influenced the decline in break-even rates?

• Rising inflation

• High unemployment

• Stable oil prices

• Increased bond yields

What is expected to drive inflation according to the third section?

• Stable bond markets

• Increased oil prices

• Wage growth

• Higher interest rates