ECONOMYNEWS COMMUNICATIONS SERVICE, Oct 15 The U.S. released its September consumer price index (CPI) data, and Citigroup economists stated that the core CPI was "far above our expectations and the consensus forecast," predicting the Federal Reserve will raise rates at its December meeting. Some economists even anticipate the Fed might consider a larger 50-basis-point rate hike in December.
Citigroup economists Veronica Clark and Andrew Hollenhorst stated in a report that they expect the Fed to hold steady in October but raise rates by 25 basis points in December, after which rates will remain unchanged until rate cuts begin in June next year, with three rate cuts expected throughout the year.
Jason Schenker, president of Prestige Economics and a prominent economist who earlier accurately predicted the September rate hike, boldly forecast a 50-basis-point rate hike by the Fed in December. He pointed out that between the October and December meetings, there will be two employment reports and another CPI data release, which will provide the basis for the Fed's decision-making. "If they find that a 25-basis-point hike is ineffective, I think they might raise rates by 50 basis points."
He believes that after the September rate hike, the Fed might "allow policy effects to breathe a little" before considering a larger rate hike in December. If a larger rate hike occurs in December, a pause in further hikes is possible early next year. If only a 25-basis-point hike occurs in December, the likelihood of another rate hike in the first quarter of next year would be higher. (rc)
Citigroup economists Veronica Clark and Andrew Hollenhorst stated in a report that they expect the Fed to hold steady in October but raise rates by 25 basis points in December, after which rates will remain unchanged until rate cuts begin in June next year, with three rate cuts expected throughout the year.
Jason Schenker, president of Prestige Economics and a prominent economist who earlier accurately predicted the September rate hike, boldly forecast a 50-basis-point rate hike by the Fed in December. He pointed out that between the October and December meetings, there will be two employment reports and another CPI data release, which will provide the basis for the Fed's decision-making. "If they find that a 25-basis-point hike is ineffective, I think they might raise rates by 50 basis points."
He believes that after the September rate hike, the Fed might "allow policy effects to breathe a little" before considering a larger rate hike in December. If a larger rate hike occurs in December, a pause in further hikes is possible early next year. If only a 25-basis-point hike occurs in December, the likelihood of another rate hike in the first quarter of next year would be higher. (rc)