Second, there is an adjustment component that reflects our monetary policy response to the current high inflation. It is fully priced (in line with our expressed policy intentions) that the main policy rate (the DFR) will reach 300 basis points in March, and it is priced to rise even higher subsequently.
This component (going beyond the policy rate of around 200 basis points that the market expects to prevail over the long term) can be viewed as restrictive and further adds to the tightening of financial conditions, even if it is less persistent than the normalisation component of our policy adjustment.