Allen Sounds Alarm on Interest Rate Hikes

Deutsche Bank strategist Henry Allen is warning that investors are underestimating the scale of rate hikes needed to tackle inflation. According to him, there's a 'fundamental dislocation' between the outlook for limited interest rate rises from the US Federal Reserve and European Central Bank and growing inflationary pressures.

The pressure on prices is rising at a rate last seen in the wake of the pandemic, when US CPI inflation was running at 5%. Allen believes this unsustainable situation will force central banks to reassess their stance on interest rates.