Fed officials signal more rate hikes amid inflation
6.8 Macro Fed officials signal more rate hikes due to persistent inflation, with Waller and Logan supporting further tightening. Bitcoin and stock futures drop in response to the hawkish stance.
Federal Reserve officials are signaling continued monetary tightening in response to persistent inflation. Christopher Waller emphasized the need for additional policy action, supporting a 25 basis point rate hike in December, or a 50 basis point increase if October’s core CPI reaches 0.3% or higher. Although headline inflation slowed to 0.4% in October, core prices rose 0.3% for the third consecutive month, keeping the possibility of a larger December hike on the table. Lorie Logan suggested at least two more 25-basis-point rate hikes this winter, citing inflation remaining above the Fed’s 2% target and advocating for a more restrictive policy stance. Waller also noted that even improved inflation data would not alter his support for a December rate hike. These hawkish signals led to declines in Bitcoin and stock futures. Internal Fed analysis points to ongoing producer price increases, potential energy price shocks, and a strong labor market close to the Fed’s employment goals.
