Fed Officials Signal Further Rate Hikes as Inflation Stalls Above Target
Following a 25-basis-point rate hike and the end of its blackout period, multiple Federal Reserve officials, including St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee, signaled that further rate increases are likely due to persistent inflation and strong demand. Core inflation remains about 1 percentage point above the 2% target and is moving in the wrong direction. Markets price a 50% probability of another hike next month, with Wall Street forecasts for the terminal rate ranging from 4.5% to above 5%.
Reference imageEditorial responsibility
- No named human review is recorded for this page.
- Reports are grouped by semantic similarity and deterministic rules. Language models may assist titles, summaries, translation and cross-source analysis; the page reads the event directly, while its address stays stable when the title changes.
- Summary covers the current reports
Cross-source coverage
Reporting timeline
Fed Officials Signal More Rate Hikes as Inflation Persists, Hawkish Stance Emerges
Following the end of the Federal Reserve's quiet period, multiple officials are set to speak on monetary policy, with hawkish voices emerging. St. Louis Fed President Alberto Musalem stated that the Fed likely needs to continue raising interest rates due to strong demand and persistent supply shocks, arguing that early action is preferable. He noted that core inflation remains about 1 percentage point above the 2% target and is moving in the wrong direction. Chicago Fed President Austan Goolsbee, a dovish member, also acknowledged that further rate hikes may be needed due to strong demand, though he warned of potential negative impacts on employment and growth. Market pricing suggests a 50% probability of a rate hike next month, with expectations of three more quarter-point hikes by April 2027. Wall Street is divided on the terminal rate: Goldman Sachs and Mizuho expect a pause after December, while Societe Generale and Danske Bank forecast a terminal rate of 4.5%. Bank of America warns rates could rise above 5%, potentially reaching the 5.5% peak of the 2022-2023 cycle.
Read sourceFed Officials Signal Possible Rate Hikes as Inflation Persists, Hawkish Views Emerge
Following the end of the Federal Reserve's quiet period, multiple officials are set to speak on monetary policy. St. Louis Fed President Alberto Musalem, a hawkish FOMC voter, stated that the Fed likely needs to continue raising interest rates due to strong demand and commodity price shocks, arguing that early action is preferable. He noted that core inflation remains about 1 percentage point above the 2% target and is moving in the wrong direction. Chicago Fed President Austan Goolsbee, a dovish member, also acknowledged that further rate hikes may be needed but warned of potential negative impacts on employment and growth. Market pricing suggests a 50% probability of a rate hike next month, with expectations of up to three more hikes by April 2027. Wall Street forecasts diverge: Goldman Sachs and Mizuho expect a pause after a December hike, while Societe Generale and Danske Bank predict a terminal rate of 4.5%. Bank of America warns rates could rise above 5%, potentially reaching the 5.5% peak of the 2022-2023 cycle.
Read sourceFed Officials Signal More Rate Hikes as Inflation Persists, Hawkish Stance Emerges
Following the end of the Federal Reserve's quiet period, multiple officials are set to speak on monetary policy, with hawkish voices emerging. St. Louis Fed President Alberto Musalem stated that the Fed likely needs to continue raising interest rates due to strong demand and persistent supply shocks, arguing that early action is preferable. He noted that core inflation remains about 1 percentage point above the 2% target and is moving in the wrong direction. Chicago Fed President Austan Goolsbee, a dovish member, also acknowledged that further rate hikes may be needed due to strong demand, though he warned of potential negative impacts on employment and growth. Market pricing suggests a 50% probability of a rate hike next month, with expectations of up to three additional 25-basis-point hikes by April 2027. Wall Street forecasts diverge: Goldman Sachs and Mizuho expect a pause after a December hike, Societe Generale and Danske Bank see a terminal rate of 4.5%, while Bank of America warns rates could rise above 5%, potentially reaching the 5.5% peak of the 2022-2023 cycle.
Read sourceShow 3 older updatesHide older updates
Fed Officials Break Silence: Hawkish and Dovish Voices Signal More Rate Hikes Ahead
Following the Federal Reserve's 25-basis-point rate hike and the end of the blackout period, at least 10 Fed officials are scheduled to speak this week, potentially shaping the outlook for the current tightening cycle. St. Louis Fed President Alberto Musalem, a hawkish FOMC voter, stated that the Fed likely needs to continue raising rates due to strong demand and persistent supply shocks, including tariffs and rising oil prices. He argued that acting early is less disruptive than acting later, and that the current policy rate of 3.75%-4.00% remains accommodative. Even dovish Chicago Fed President Austan Goolsbee acknowledged that strong demand may be driving inflation and that further rate hikes may be needed. Market pricing via the CME FedWatch tool shows a 50% probability of another rate hike next month, with some traders expecting three more quarter-point hikes by April 2027. Wall Street is divided on the terminal rate: Goldman Sachs and Mizuho expect a pause after a December hike, Societe Generale and Danske Bank forecast a terminal rate of 4.5%, while Bank of America warns rates could rise above 5%, potentially reaching the 5.5% peak of the 2022-2023 cycle.
Read sourceFed Officials Break Silence: Hawkish Voices Emerge as Inflation Persists, Rate Path Uncertain
Following the end of the Federal Reserve's blackout period, multiple Fed officials are scheduled to speak this week, potentially influencing the outlook for the current rate-hiking cycle. The Fed recently raised rates by 25 basis points and removed language attributing inflation partly to supply shocks, signaling growing internal doubt that price pressures will fade on their own. Hawkish St. Louis Fed President Alberto Musalem stated that further rate hikes are likely due to strong demand and commodity price shocks, arguing that early tightening is less disruptive than later, larger moves. He noted that core inflation remains about 1 percentage point above the 2% target and is moving in the wrong direction. Even dovish Chicago Fed President Austan Goolsbee acknowledged that strong demand may be driving inflation and that further hikes may be needed, though they could hurt employment. Market pricing via the CME FedWatch Tool shows a 50% probability of another hike next month, with some traders expecting three more quarter-point hikes by April 2027. Wall Street forecasts diverge: Goldman Sachs and Mizuho expect a pause after December, Societe Generale and Danske Bank see a terminal rate of 4.5%, while Bank of America warns rates could rise above 5%, potentially revisiting the 5.5% peak of the 2022-2023 cycle.
Read sourceFed Officials Signal More Rate Hikes as Inflation Persists, Hawkish and Dovish Voices Converge
Following the end of the Fed's quiet period, multiple Federal Reserve officials are set to speak this week, potentially shaping the outlook for the current rate-hiking cycle. St. Louis Fed President Alberto Musalem, a hawkish FOMC voter, stated Monday that further rate increases are likely due to strong demand and commodity price shocks, arguing that acting early is preferable to delaying. He noted that core inflation remains about one percentage point above the 2% target and is moving in the wrong direction. Chicago Fed President Austan Goolsbee, a dovish member, also acknowledged that strong demand may be driving inflation and that further rate hikes may be needed, though he warned of potential negative impacts on employment and growth. Market pricing via the CME FedWatch Tool shows a 50% probability of a rate hike next month, with some traders pricing in three additional 25-basis-point hikes through April 2027. Wall Street forecasts diverge: Goldman Sachs and Mizuho expect a pause after a December hike, Societe Generale and Danske Bank see a terminal rate of 4.5%, while Bank of America warns rates could rise above 5%, potentially reaching the 5.5% peak of the 2022-2023 cycle.