Weekly Commentary: Central bank inflation fight to carry on

Central banks are set to hike policy rates this week. Markets expect rate cuts to soon follow due to cooling inflation, whereas we see central banks holding tight. U.S. stocks rose last week as initial earnings updates topped low expectations. We think earnings will contract in 2023’s second half as wage gains hit margins. The Fed and European Central Bank will likely raise interest rates again this week. We see the Bank of Japan opting to keep policy loose to sustain inflation.