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News and opinion for Michigan, Eaton County, and the Mulliken area

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Markets raise odds of a Fed rate hike after Warsh’s inflation warning

A2D News Desk

Investors increased their expectations for a Federal Reserve rate hike after Chair Kevin Warsh used a speech Friday to emphasize the need to bring inflation back to the central bank’s 2% target. Warsh did not say whether officials should raise rates, but traders interpreted his remarks as hawkish.

Markets were pricing in a 60% chance of a quarter-point increase by late Friday morning, up from 35% before the speech, according to CME Group’s FedWatch tool. Thirty-year Treasury yields held steady after the remarks.

Warsh said recent inflation readings had improved but did not show meaningful progress in underlying trends. Higher rates could create short-term economic pain, while helping support longer-term growth if they bring inflation under control.

Read the full story at investopedia.com.

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