Barclays cite the Federal Reserve's "new framework" (which, ICYMI, is the Bank wants to see actual inflation above 2%, not just forecasts for inflation)
(which, again ICYMI, will delay any hikes, i.e. there will be no pre-emptive hiking ... at least that what they tell us)
But what about tapering of the QE programme? That's a way off too, Barclays analyst says (even after Friday's strong NFP):
- the road to full employment is still long
- inflation is unlikely to remain at the levels priced in for long
(i.e. Barclays thinking, like everyone else, that the higher current inflation is transitory)
Therfore:
- Market pricing of one hike by Q1 2022 & almost four by the of 2023 is too aggressive
Barclay's caveat on there is still a long time until tapering (the first step to 'normalisation') is, "unless there has been substantial progress on broader metrics"