The big question is when the Fed will get off the brakes.

There’s a reasonable theory that they could get up to ‘moderately restrictive’ which is around 3% and decide then that 2% inflation will be on its way. That would be around year end.

For that to happen though, we’d likely need to see a pronounced slowdown in growth bordering on a recession, continued weakness in stocks and clear evidence of supply chains being unlocked (and no new lockdowns in China). Mixed in will be how commodity prices perform.

Markets have clearly shifted to a paradigm of worry about growth, which coincides with the Fed overtightening. So the question is, what would the Fed need to see to halt hikes and could it be less than what I’ve outlined above?

This article was written by Adam Button at