PIIE Director Sees 90% Chance of Rate Hike This Year
MacroDigital Finance
Adam Posen, director of the Peterson Institute for International Economics (PIIE), a leading U.S. think tank, said on the 28th that there is a "90%" probability of a rate hike by the Federal Reserve within the year. He expressed concern over the high level of underlying inflation, excluding supply shocks such as high oil prices. He gave an interview to Jiji Press on the occasion of the annual economic symposium "Jackson Hole Conference." On the same day, Fed Chair Warsh emphasized in his speech at the conference that if underlying inflation does not slow, "there is work to be done," signaling a stance that does not rule out future rate hikes. While market participants widely expect the Fed to raise rates at its September policy meeting, Posen predicts that the December meeting is more likely. He cited the presence of President Trump, who is increasing pressure for rate cuts, and noted that "hesitation would arise" in seeking a policy shift ahead of the autumn midterm elections.
