Apollo's Torsten Slok: A Fed rate hike is still 'extremely unlikely'

• Market odds for a Fed rate hike have risen to 42% by October (from 19% yesterday) due to geopolitical tensions and higher oil prices, but Slok views a hike as 'extremely unlikely'.
• The US economy is described as 'remarkably well' with strong airline traffic, retail sales, and hotel demand, supported by tailwinds from AI spending and infrastructure bills.
• The ECB faces a more challenging situation with its sole inflation mandate, as markets are pricing in hikes despite a slowing European economy, creating 'real headaches' in Frankfurt.

Torsten Slok of Apollo Global Management discusses the shifting outlook for Fed rate policy, noting that market pricing for a rate hike has increased due to geopolitical tensions and higher oil prices. Despite this, he believes a Fed hike is 'extremely unlikely', citing the resilient US economy and potential demand destruction from prolonged oil shocks. He contrasts the Fed's dual mandate with the ECB's single mandate.