Deutsche Bank Strategist: Traders Underestimate Rate Hikes

This warning from a major bank's strategist signals that market pricing for central bank tightening could be misaligned with underlying cost pressures. The ISM services input price surge, recalling when CPI was 5%, suggests inflation may be more persistent than current rate expectations imply. This matters for fixed-income traders and rate-sensitive assets, as a repricing of hike expectations could trigger volatility. The key question is whether upcoming inflation data confirms this disconnect, prompting a shift in market consensus.