Fed Considers New Rate Hikes to Control Inflation

The balance of the US Federal Reserve System decreased by $4.673 billion in one week. Market analysts are revising expectations for the key interest rate ahead of upcoming regulator meetings.

Market Participants' Forecasts

• October 28: The current rate is expected to remain unchanged.
• December 9: A 25 basis point increase to the range of 4.00–4.25% is forecasted.

Federal Reserve Members' Views on Future Policy

Federal Reserve Chair James Williams stated that there is no need to rush with new steps after the September hike. The regulator may wait for additional macroeconomic data, but another increase could be possible closer to the end of the year to return inflation to the target level of 2%.

Raford Kashkari expects further tightening of policy, anticipating an interest rate hike in 2026 and 2027. If the economy remains strong and inflation stable, the regulator will have to raise the rate above current market expectations.

Nelli Logan considers the September hike only as a first step. Reaching the 2% goal may require an additional rate increase of at least 50 basis points, the timing of which depends on macro data and financial conditions.

Christopher Goolsby notes that inflation remains the main problem, while the labor market looks stable. At the October meeting, both a rate hike and a pause are possible; the decision will depend on new data.

Barbern Kuku warns of inflationary pressure from artificial intelligence in 2027 due to investment growth and capacity shortages. Geopolitical shocks may complicate the fight against prices, requiring a more flexible response from the Fed.