Fed open to another interest rate hike after expected increase in July
US Federal Reserve policymakers favours more rate rises this year, saying July meeting likely to resume raising interest rates to tame the inflation. Though the Fed officials were encouraged by a slide in price pressures in June, but they’re don’t want to pronounce an end to their battle to rein in inflation that has repeatedly surprised them with its persistence. “It’s really too early to say that we’ve declared victory on inflation," Bloomberg reported quoting Mary Daly, Federal Reserve Bank of San Francisco President’s CNBC interview.
“The robust strength of the labor market and the solid overall performance of the US economy gives us room to tighten policy further," Reuters reported quoting Federal Reserve Governor Christopher Waller. The Reuters report said the Federal Reserve Governor supported the Fed hiking by two more quarter percentage point increases this year.
Waller noted “I see no reason why the first of those two hikes should not occur at our meeting later this month." He further said "If inflation does not continue to show progress and there are no suggestions of a significant slowdown in economic activity, then a second 25-basis-point hike should come sooner rather than later, but that decision is for the future." He noted, “September is a live meeting" for action if inflation is not cooling fast enough. Waller’s comments follow the release earlier in the week of data that showed inflation pressures at the consumer level are swiftly cooling back toward the Fed's 2% target.
Investors have increased bets that the widely anticipated quarter-percentage-point increase at the Fed’s July 25-26 meeting will be the central bank’s last in this credit tightening cycle. Stock and bond prices bounded higher on
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