Goldman Sachs: If Inflation Does Not Cool, the Fed Is Expected to Raise Rates as Early as September

Odaily Planet Daily News Kaplan, Vice Chairman of Goldman Sachs and former President of the Dallas Federal Reserve, stated that if inflation remains high, the Federal Reserve may need to raise interest rates as early as September. Kaplan said: "If inflation data does not cool between now and September, it would be wise for the Fed to take action in September or the fall. That would be the more prudent approach." After Fed Chair Walsh signaled a continued focus on combating inflation, the market turned hawkish. Traders sold off short-term Treasury bonds, pushing up some yields. Walsh's stance was reinforced by the personal forecasts of Fed members, half of whom expect rate hikes before the end of the year. Kaplan said that if inflation remains stubborn, it would indicate that monetary policy is still too loose. He also pointed out: "The Fed's policy actions are rarely single operations; rate hikes often occur in series of two or three. So I believe, if you act in September, you need to be prepared. There may be one or two more to follow." (Jinshi)