Your Weekend Reading: Climbing to a Higher Peak Interest Rate

The US hasn’t hit peak interest rates and it may be awhile until it does. The Federal Reserve raised rates this week by 75 basis points for the fourth time in a row, as had been expected. But the central bank also provided a sobering forecast, indicating rates would eventually end up higher than originally projected. It would be “very premature” to think about a pause in hikes, Chair Jerome Powell said, though he added the size of future rises would likely shrink. Friday’s jobs report, showing a still-strong US employment picture, didn’t lend much clarity to the length of the tightening cycle or the risk of a downturn. In the UK, which is headed for a deep slump, the Bank of England delivered its biggest rate hike in 33 years but pushed back against market expectations for the scale of future increases. John Authers, writing in Bloomberg Opinion, cautioned that “investors need to stop imagining pivots that will only lose them money.”

A mysterious screenshot that blew up on social media sparked a huge market rally in China. The message it contained indicated the country’s “Covid-zero” lockdowns could finally come to an end, and investors looking for reasons to buy beleaguered Chinese stocks pounced. Another, more solid reason for optimism: Beijing’s potential plan to scrap a system that penalizes airlines for bringing coronavirus cases into the country.