Jin10 Roundup: Reasons for Fed Rate Hike and Hold

TechFlow News, October 29 — According to Jin10 Data, the roundup lists multiple reasons supporting a Fed rate hike and holding rates steady. The case for a hike says September CPI and PPI data remained elevated, underscoring that this year marks the second consecutive year of failing to make progress in reducing inflation; hawks believe that, given widespread market expectations for a December hike, waiting another six weeks may increase the cost of delayed action, and current policy has not yet reached a restrictive level.

The case for holding rates steady says that if policymakers still believe 2 to 3 more rate hikes are needed, spreading the remaining hikes carries little cost; former Fed official Kaplan noted that the risk of acting six weeks later is manageable, while consecutive hikes could signal to the market that the rate-hike cycle is faster than policymakers expect.

The roundup also noted that officials had previously hinted they were not in a hurry to act, and Warsh's silence heightened market expectations of holding rates unchanged; the Fed has never raised rates as a surprise ahead of an election, and a sudden hike on the eve of an election could trigger market turmoil.

Source: TechFlow