Fed watcher: A December rate hike is all but certain, with focus shifting to the size and pace of increases

Odaily reports: Nick Timiraos wrote that after the release of a third consecutive stronger-than-expected inflation report, a Federal Reserve rate hike in December is all but certain, and market focus is shifting to the size of the increase and the subsequent pace, including a 25 basis point hike at each meeting, a one-time 50 basis point increase, or a signal of multiple consecutive 25 basis point hikes.

Nick Timiraos noted that the Federal Reserve will hold its policy meeting on December 8-9, and the bigger question is whether this rate hike is the mild adjustment of two to three more increases envisioned by several officials, or the beginning of a sustained campaign to restrain the economy and bring down inflation.

Previously, Federal Reserve Governor Waller, who supported keeping rates unchanged last week, said that if the month-on-month increase in core prices in October reached about 0.3%, the Federal Reserve should consider a 50 basis point rate hike in December, and the latest data released happened to match that scenario. Dallas Fed President Logan also hinted after the data release that, given current inflation pressures, it may be necessary to accelerate the pace of rate hikes. Such tactical choices are usually decided by the Federal Reserve Chair. (Wall Street Journal)