FED Member Speaks: Has Inflation Peaked? How Much Will the FED Raise Rates?

While the eyes are turned to the Jackson Hole meeting, which will start today, comments on interest rate hikes continue to come from FED members.

Although the markets are especially locked into Powell’s statements tomorrow, the hawk or pigeon statements of other FED members can be effective.

The latest statements show that FED members could not reach a consensus on a 75 basis point rate hike. This confusion is expected to dissipate with the data coming before the FED meeting in September.

According to the WSJ’s report, one of the confused Fed members is Raphael Bostic. Although Bostic, who is also the Atlanta Fed Chairman, does not have the right to vote at the meeting, his statements are followed closely.

50 bps or 75 bps?

Undecided on whether to raise interest rates by 50 basis points or 75 basis points at the September meeting, Bostic said:

“I haven’t made up my mind on how much of a rate hike is needed in September.

We will see critical employment and inflation data before the meeting.

Stronger employment data comes in and if inflation does not slow down, this could lead the Fed to a 75 basis point increase.

It is too early to say that inflation has peaked. We still have a long way to go this year in terms of interest rate hikes.

I think the economic outlook is good and interest rate hikes will not hurt growth.”

The Fed had increased interest rates by 75 basis points at its July meeting. The next rate decision will be announced on September 21.

We see that the market is also undecided about the rate of increase in interest rates.

Expectations are as follows: 56% 75% basis points – 44% 50 basis points

*Not Investment Advice.