Rosenberg says one Fed hike isn't the mistake, five would be

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1. 1h ago

   Economists Warn Fed Against Aggressive Rate Hikes

   Economist Rosenberg argues that a single Federal Reserve rate hike is not a mistake, but implementing five would be, echoing warnings from prominent economists about potential policy errors. Wall Street anticipates the Federal Open Market Committee will approve a quarter-point increase, marking the first rate hike in three years. Traders have priced in a probability greater than 90 percent for the upcoming quarter-point adjustment to the overnight funds rate. Moody's Mark Zandi cautions that raising rates as expected could constitute a serious mistake for the economy. Analysts debate whether high inflation or declining central bank credibility poses the greater risk as the decision approaches.

   Why it matters

   Market participants are closely monitoring the Federal Reserve meeting as the central bank prepares to shift its monetary policy stance after a three-year pause. Economists and analysts are divided on the appropriate pace of tightening amid persistent inflationary pressures. The debate centers on balancing necessary measures to control inflation against the risk of destabilizing broader financial markets.

   What is confirmed

   • Wall Street expects the Federal Open Market Committee to approve a quarter-point increase in the overnight funds rate.
   • Traders assigned a probability greater than 90 percent that the Federal Reserve will raise rates for the first time in three years.
   • Moody's Mark Zandi warns of a serious mistake if the Federal Reserve hikes rates as expected.
   • Rosenberg states that a single Federal Reserve rate hike is not the mistake, but five would be.

   Still unconfirmed

   • Prominent economists warn that the Federal Reserve may be on the verge of a serious policy mistake.

   What to watch next

   • The official announcement from the Federal Open Market Committee regarding the overnight funds rate.
   • Market reaction and asset price adjustments following the implementation of the expected quarter-point rate increase.
   Sources used for this update (6)

   1. Financial Times — High inflation or low credibility?
   2. MarketWatch — The Fed may be on the verge of a serious mistake, prominent economists warn
   3. KITCO — Rosenberg says one Fed hike isn't the mistake, five would be
   4. Yahoo Finance — Moody's Mark Zandi warns of a 'serious' mistake if the Fed hikes rates as Wall Street expects a quarter-point increase
   5. TradingView — A rate hike shouldn't derail the market or the economy
   6. www.cnbc.com — The Federal Reserve is expected to hike rates for the first time in three years: Live updates
   confidence 90%