Investors predict supersized interest rate hike by Fed after red-hot inflation
SIMONE DEL ROSARIO: WE HAVEN’T SEEN INFLATION THIS HIGH SINCE 1981…AND NOW – WE COULD SEE THE FED DO SOMETHING IT HASN’T DONE SINCE THEN TO TAME IT.
AND THAT’S RAISE ITS BENCHMARK INTEREST RATE A FULL PERCENTAGE POINT AT ONE TIME.
THE POSSIBILITY – PENCILED IN AFTER JUNE’S 9.1% CONSUMER PRICE REPORT.
ATLANTA FED PRESIDENT RAPHAEL BOSTIC TELLING REPORTERS “EVERYTHING IS IN PLAY.” WHILE OTHERS SAY 75 BASIS POINTS IS THE MINIMUM.
CLEVELAND FED PRESIDENT LORETTA MESTER: what i take from the report and it was uniformly bad there was no good news in that report at all is that inflation remains at an unacceptably high level we at the fed have to be deliberate and intentional about continuing on this path of raising our interest rate.
SIMONE DEL ROSARIO: THE FED STARTED SLOWLY HIKING RATES IN MARCH, MAKING BORROWING MONEY MORE EXPENSIVE FOR EVERYONE…BUT SINCE THEN INFLATION HAS CONTINUED TO CLIMB, CAUSING THE GOVERNING BODY TO TAKE A BIGGER LEAP IN JUNE.
FEDERAL RESERVE CHAIR JEROME POWELL: clearly today’s 75 basis point increase is an unusually large one and i do not expect moves of this size to be common. from the perspective of today either a 50 basis point or 75 basis point increase seems most likely at our next meeting.
SIMONE DEL ROSARIO: BUT NOW, INVESTORS THINK 100 POINTS COULD BE ON THE TABLE.
WHICH WOULD BRING THE OVERNIGHT BORROWING RATE MORE THAN 2% HIGHER THAN IT WAS 4 MONTHS AGO.
CLEVELAND FED PRESIDENT LORETTA MESTER: i have not seen any convincing evidence that inflation has turned the corner.
SIMONE DEL ROSARIO: AND NOW WE’LL FIND OUT HOW AGGRESSIVE THE FED WILL REACT TO THE LATEST NUMBERS – IN LESS THAN TWO WEEKS.
IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.