Following the record-breaking inflation data in the US, the Fed’s expectations for a 100 basis point increase in interest rates came to the agenda.
Fed officials may discuss a 100 basis point rate hike this month amid inflation rising to 9.1 percent. At the bank’s meeting this month and in September, it is considered certain to increase interest rates by at least 75 basis points each. If the Fed raises interest rates by 100 basis points at its July 26-27 meeting, it will be the biggest rate hike since the early 1990s.
Nomura economists also announced that they expect an interest rate hike of 100 basis points at the next meeting after the inflation data. They said, “incoming data show that the inflation problem is getting worse. “We expect the Fed to raise interest rates higher for its credibility.” Citigroup US economist Andrew Hollenhorst also said a 100 basis point increase should be on the table at this month’s meeting. Hollenhorst said, “must be cautious about peaking inflation because it was stated just a few months ago that 8.3 percent would peak.”
