“We think the growth trend is going to be very bullish and inflation is also going to be slightly higher in the first half of this year,” he said.
Hopper then expects central banks to tighten their monetary policy, and become less stimulating in the second half of the year to shrink their balance sheets and soften growth expectations.
Still, Invesco is expecting the Bank of Canada to hike six rates this year, and is concerned that if they don’t we could “see a huge market backlash”, as it already costs them all. .
However, Hopper said the current situation has reduced market volatility and increased certainty and investment, which is a good backdrop for financial assets.
“When you’re at the juncture, which banks are clearly in and are starting to raise rates, even though the market is already priced,” he said, “you start to look, more broadly. Speaking of, market volatility because you’re just going through this forward guidance.”