Market spooked because now the Fed may need a supersized hike in December
Wall Street was recently able to put inflation worries on the back burner, as traders focused on the midterm elections and swings in tech stocks. That’s over now.
Federal Reserve Governor Christopher Waller has indicated a likelihood of a December interest rate hike, despite calls for lower borrowing costs from President Donald Trump. Speaking in London, Waller emphasized the need for swift action to tackle high inflation, stating that monetary policy was required to bring inflation back to a 2% target in the medium term.
He suggested a potential 0.5 percentage point increase if October's CPI data shows continued upward pressure. This statement supports the possibility of the Federal Open Market Committee raising rates for the second time in three meetings, which could negatively impact Trump's policies. Waller criticized September's inflation data, describing it as "bad" with no positive aspects.
He pointed to AI development and energy price pressures as factors contributing to inflation, suggesting a stronger policy move might be needed even if October's inflation rate improves.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 2 other outlets
- Top Fed official backs December interest rate hike freemalaysiatoday.com
- Stocks cut gains, dollar and yields up as US CPI cements December rate hike bets channelnewsasia.com
