BlockBeats News, November 14: Fed officials delivered a flurry of hawkish remarks this week, largely cementing market expectations for a 25-basis-point rate hike in December and further opening the door to consecutive hikes in January next year. The U.S. October CPI showed inflation accelerating and price pressures broadening, while year-over-year wholesale price growth in October also rose to its highest level since 2022, further strengthening the case for rate hikes.

New York Fed President Williams said inflation remains too high, Chicago Fed President Goolsbee called the latest data concerning, and Dallas Fed President Logan said rates may need to rise faster than previously expected. Fed Governor Waller raised the possibility of a 50-basis-point rate hike next month. Markets are now pricing in 25-basis-point hikes in December, January next year, and March, whereas previously they had expected hikes only in December and March next year.

Bank of America has incorporated rate hikes at each of the next three meetings into its forecast, while Santander expects hikes in December and next March. However, officials remain divided over the pace of rate increases, with some advocating gradual, modest hikes. Boston Fed President Collins said the direction of further policy tightening is clear, but she was unwilling to prejudge the size and pace of rate hikes.

Rising expectations for rate hikes have pushed Treasury yields higher, but factors such as weakness in the housing market, the possibility of a stock market decline if returns on AI investments fall short of expectations, and a potential drop in energy prices in the future remain variables the Fed must consider in its decisions.