Fed Mouthpiece: December rate hike is almost certain, focus has shifted to the pace of rate hikes.
18 minutes ago
Nick Timiraos, chief economic correspondent at The Wall Street Journal and widely known as the "Fed mouthpiece", wrote in a new article that after the release of the third consecutive stronger-than-expected inflation report, a December interest rate hike by the Federal Reserve is now all but certain. The real question is the pace of hikes: whether to continue with 25 basis point increases per meeting, a one-off 50 basis point hike, or signal a series of consecutive 25 basis point increments. Timiraos noted that a rate hike at the Fed’s December 8-9 policy meeting is all but a done deal, with the bigger question being how quickly the central bank will act, and whether this remains the moderate adjustment of two to three additional rate hikes envisioned by multiple officials, or the start of a longer campaign to cool the economy and bring down inflation. Fed Governor Christopher Waller, who last week had supported holding rates steady, said ahead of the data release that if October’s core CPI rose around 0.3% month-over-month, a 50 basis point hike should be considered in December – and the data released that day matched exactly that scenario. Dallas Fed President Lorie Logan also signaled after the data release that, given current inflationary pressures, it may be necessary to speed up the pace of rate hikes, a tactical decision that typically falls to the Fed Chair.
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