Credibility was Likely Main Motivation for Fed Rate Hike This Time
Dow Jones
2 hours ago
0233 GMT - The main motivation behind the Fed's decision to hike rates this time was credibility, given bond market pricing and recent developments in oil markets, says Christian Scherrmann, DWS Chief U.S. Economist. If U.S. inflation doesn't cool down in coming quarters, one or two rate hikes by the Fed may not suffice. One or two rate hikes will also likely not solve problems caused by external shocks, such as rising oil prices and renewed uncertainty from tariffs, Scherrmann says in a note. Nevertheless, there are good reasons to believe that inflation will trend lower and that tightening to the point where domestic demand slows will be unnecessary, Scherrmann adds.
At the request of the copyright holder, you need to log in to view this content
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.