Three Federal Reserve Presidents Call for Immediate Rate Hike

Just two days after the U.S. Federal Reserve (Fed) decided to keep interest rates unchanged, the presidents of the Cleveland, Minneapolis, and Dallas Federal Reserve Banks have argued for an immediate increase in rates. They emphasized that the current monetary policy makes it difficult to lower inflation to the 2% target and raised the possibility of consecutive additional hikes. President Harker stated that inflation has exceeded 2% for more than five years and that raising rates could help reduce inflationary pressures by constraining economic activity. President Kashkari mentioned the need for gradual policy tightening to manage high inflation, while President Logan assessed that the current monetary policy is not effective in lowering prices. The Fed had frozen the benchmark interest rate at 3.50-3.75% during the FOMC meeting on the 29th, with a voting outcome of 9 to 3. Concerns are growing in the market regarding the Fed's commitment to addressing inflation, and the yield on 30-year U.S. Treasury bonds has surpassed 5.2%, reaching its highest level in 19 years.

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