Nick Timiraos, The Wall Street Journal’s chief economics correspondent, known as the “Fed whisperer,” wrote recently that the rebound in U.S. inflation is disrupting the gradual pace of rate hikes the Federal Reserve had previously sought to maintain. Fed officials spent all of October trying to dispel market expectations of a rapid succession of rate hikes in the near term, but the latest data did not support their efforts.
Data released Tuesday by the U.S. Department of Labor showed that core consumer prices, excluding food and energy, rose at an annualized rate of 3.7% in the three months through October, a marked acceleration from 1.6% in the three months through July.
The report further strengthened market expectations that the Fed will raise rates at its December 8–9 meeting. The real debate has shifted from whether a rate hike is needed to how quickly monetary policy should be tightened.
The article noted that the Fed now faces two choices: continue at the previously envisioned pace, raising rates two or three more times by 25 basis points each; or move faster, actively curbing economic activity and inflation through consecutive rate hikes or even a one-time 50-basis-point increase.
Data released Tuesday by the U.S. Department of Labor showed that core consumer prices, excluding food and energy, rose at an annualized rate of 3.7% in the three months through October, a marked acceleration from 1.6% in the three months through July.
The report further strengthened market expectations that the Fed will raise rates at its December 8–9 meeting. The real debate has shifted from whether a rate hike is needed to how quickly monetary policy should be tightened.
The article noted that the Fed now faces two choices: continue at the previously envisioned pace, raising rates two or three more times by 25 basis points each; or move faster, actively curbing economic activity and inflation through consecutive rate hikes or even a one-time 50-basis-point increase.