Bank of America and 7 Rate Hikes, Iran and Oil

On Thursday, another portion of inflation statistics from the United States will be published, and Bank of America, anticipating its next increase, announced its forecast for the number of Fed rate hikes in 2022.

The number of expected promotions is impressive - 7 pieces. This is the most aggressive forecast to date from leading experts. As an additional motivation, Bank of America analysts cite Friday's data on the US labor market, which, among other things, showed a sharp increase in wages in the US (by 0.7% in January to 5.7% per annum), which was the highest since March 2007.

Meanwhile, US Treasury yields are rising, as are the chances of a rate hike in March. Moreover, the probability that it will be increased not by 0.25%, but immediately by 0.5% has already approached 40%.

But that didn't stop the US stock market from rising yesterday. The main reason for growth is the quarterly reporting of corporations, which, although in some cases raises questions, but for the most part, it turns out to be excellent. However, if you wish, you can find a negative.

For example, analysts at Wells Fargo note that the profit margin compared to the third quarter, and a number of large companies in the reports mention the threat of inflation. Well, do not forget that many companies did not give forecasts for future quarters and the year as a whole. Which indicates their uncertainty about financial results in the future.

Oil yesterday was under pressure, but not facts, but rather their expectations. I mean negotiations with Iran. While they are in the process and took a ten-day break. But according to rumors, there is progress, which means that in the event of sanctions from the United States, serious volumes of additional oil supply may appear on the market at once. According to various estimates, from 0.5 to 2 million b/d.