Start trading now on Poste Italiane

Fed Weighs Another Interest Rate Hike Amid Persistent Inflation

|

In the face of persistent inflation, marked by a 0.3% rise in the core Consumer Price Index (CPI) and an overall CPI increase of 0.4%, the Federal Reserve is contemplating another interest-rate hike this year. This potential action comes as inflation surpasses the Fed’s 2% annual goal, as reported on Thursday.

The surge in long-term Treasury yields and potential market tightening could, however, prompt policymakers to defer another hike in their meeting slated for late October to early November. This insight was offered by Kathy Bostjancic, chief economist at Nationwide Mutual Insurance Co.

Prices for services, excluding housing and energy, have seen a significant increase which is causing concern among Fed officials like Chair Jerome Powell due to its link with a tight labor market.

Despite these concerns, central bankers are emphasizing patience and require more data before deciding on another hike. This perspective is supported by the views of economists like Jay Bryson of Wells Fargo & Co. and Derek Tang of LH Meyer/Monetary Policy Analytics, as per the minutes from their September meeting.

This cautious approach is taken even though 12 out of 19 officials have signaled they would support another rate increase this year. This follows a period where the benchmark lending rate has been raised by more than five percentage points over the last 19 months.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Previous Post
Futures Point To Increased Likelihood of December Rate Hike
Next Post
India’s Retail Inflation Dips to Three-Month Low of 5.02%

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed

Invest on crypto with Gianluca Vacchi project and start making money now
Win money trading on Amazon
INVEST NOW
keyboard_arrow_up