Lates News

The unexpected shift towards a more aggressive rate hike stance by the Federal Reserve will undoubtedly disappoint President Trump, while also indicating that Fed officials are increasingly concerned about the possibility of persistently high inflation. The latest dot plot shows that among Fed officials, 9 support raising rates this year, with 6 supporting two or more increases of 25 basis points each. This is a sharp contrast to March, when not a single policy maker predicted an overall expectation of the Fed lowering rates once by 2026. In addition, Powell also emphasized the Fed's determination to combat inflation. Matthew Luzzetti, Chief U.S. Economist at Deutsche Bank, stated that considering this information, the risk of the Fed needing to hike rates has clearly increased. The financial markets also agree with this assessment. Following the Fed's statement and Powell's speech, stocks saw a significant drop and bond yields rose.