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

According to Odaily, Robert Kaplan, Vice Chairman of Goldman Sachs and former President of the Federal Reserve Bank of Dallas, stated that if inflation remains persistently high, the Federal Reserve may need to raise interest rates as early as September. Kaplan said, "If inflation data does not cool down between now and September, it would be wise for the Fed to act in September or the fall. That would be the more prudent approach." After Fed Chair Warsh hinted that he is still focused on fighting inflation, the market shifted hawkish. Traders sold off short-term Treasury bonds, pushing up some yields. Warsh's remarks were reinforced by the individual forecasts of Fed members, half of whom expect a rate hike before the end of the year. Kaplan indicated that if inflation remains stubborn, it would suggest that monetary policy is still too accommodative. 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." (Jin Shi)