Citation :
High inflation is likely to lead the Fed to consider surprising markets with a larger-than-expected 0.75-percentage-point rate increase this week A handful of Wall Street forecasters, including at investment banks Barclays and Jefferies, said Friday, after the inflation data were released, that they expected the Fed to raise rates by 0.75 percentage point this week. “We believe that risk-management considerations call for aggressive action to reinforce the Fed’s inflation-fighting credibility,” Barclays economists wrote in a subsequent report Monday. While such a move “would go against communications leading into the blackout period,” the report said “risks of prolonged inflation have intensified,” justifying the larger rate rise. “It’s a one-two punch,” said Diane Swonk, chief economist at Grant Thornton. “They’ve got to go now with 75. The Fed is behind the curve, and they know it.”
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