BNP Paribas strategist: The Fed's September rate hikes may be preventive and are unlikely to reenact 2022—2023 tightening cycle

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BNP Paribas: The Fed Is Unlikely to Reenact 2022-2023 the rate-hike cycle

PANews September 28 reported, citing a report by Cailian Press, that BNP Paribas strategist Chi Lo said that although the market expects two more rate hikes, the Fed's September rate hike is unlikely to become the beginning of a cycle similar to 2022 to 2023 a new round of tightening. Instead, this may mark the beginning of "preventive rate hikes," aimed at bringing inflation back to target by reversing last year's three rate cuts. He said that further rate hikes would not resolve external shocks such as war and energy-price inflation, but would ease financial markets' concerns about the Fed's anti-inflation credibility. The Fed cannot continue to turn a blind eye to recurring shocks or shocks that fail to subside as expected. However, by curbing inflationary pressures through slowing activity in other parts of the economy, further rate hikes could also risk pushing the economy into stagflation.

Source: https://www.panewslab.com/zh/articles/01a0e684-a997-7695-bf59-e6c56771d603