“Eagle Sounds” After Inflation Report! Fed Officials Blow Hard or Will Raise Spike Interest Rates
Financial Associated Press, October 15 (Publisher Zhao Hao) Several Federal Reserve officials have said that in order to defeat persistently high inflation, they are poised to raise interest rates to higher levels than previously planned.
On Friday (Oct. 14) local time, Kansas Fed Chairman George said in an online speech that officials should raise central bank interest rates to a restrictive level and that the peak should be higher: “You could, you’ll see. a higher point range for the federal funds rate and they have to stay there longer. “
George added that she is perhaps the most cautious at the Fed, suggesting that other officials may be more aggressive than she is. He also said that while the end point of rate hikes may be higher, the pace should not pick up as hasty action could disrupt financial markets and the economy.
Officials at the time had expected the average federal funds rate to hit 4.4% by the end of this year and peak at 4.6% by the middle of next year, according to information shown in the “dot. plot “in the Fed’s September resolution. After yesterday’s disappointing inflation report, market analysts see these figures rising in their December forecasts.
San Francisco Fed Chairman Daly also said the day the Fed raised interest rates by 300 basis points this year. While there are signs of economic cooling, she is dissatisfied with the status quo. Daly was “very supportive” of raising rates to restrictive levels, with 4.5% to 5% “the most likely outcome”.
The US CPI announced an 8.2% year-on-year rise yesterday, and the core CPI hit a 40-year high, pushing market expectations for a spike in the federal interest rate higher. In addition to the two local Fed officials aforementioned, Fed Governor Cook also said earlier today that reaching the 2% inflation target is top priority.
At press time, CME Group’s “Fed Watch Tool” shows that there is a two-thirds chance that interest rates will rise to the 4.5% -4.75% range by the end of this year.
Steven Blitz, TS Lombard’s chief US economist, commented: “They have to go higher, I think 5.5% to tame prices.”
