State Street strategist: The decision is hawkish, at least one more tightening is expected, and the February hike is likely already fully priced in.

智通财经2026/11/05 13:07

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The head of macro strategy at State Street said this is a relatively hawkish result, with dissenting votes supporting a bigger rate hike. Governor Bailey clearly stated that if energy prices remain high, more rate hikes will be needed. This, to some extent, provides a basis for the market to price in further hikes.
The head said the longer the energy shock persists and the more it feeds into overall inflation, the more likely it is that some precautionary measures will be needed—with the issue being one of timing.
He stated that if energy prices stay elevated, interest rates will clearly need to be raised again. The question is how many times; this will drive the pound and rates market in the coming weeks.
He said it seems fairly clear there will be at least one more tightening, which means February is already fully priced in. Since another hike this year is unlikely, after the February hike is completed, it will be important to observe whether the energy price shock continues.

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State Street strategist: The decision is hawkish, at least one more tightening is expected, and the February hike is likely already fully priced in.

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