December rate hike: Expectations of a Federal Reserve increase strengthen – Commerzbank

A further 25-basis-point rate increase remains Commerzbank’s forecast for the December FOMC meeting. Persistent US inflation is keeping the Federal Reserve under pressure to tighten further, according to Commerzbank’s Dr. Christoph Balz. The report points to remarks by Fed Governor Christopher Waller supporting a December hike of at least 25 basis points, with a 50-basis-point increase to be considered under certain conditions.

25-basis-point hike in focus ahead of December FOMC decision

"We continue to expect the Fed to raise interest rates at its next meeting in December."

"In a speech this morning before the data were released, influential Fed Governor Christopher Waller had already called for a 25-basis-point rate hike at the Fed’s next meeting in December, even if the figures came in better than in September."

"Waller said that if the monthly core reading was 0.3% (as now reported) or higher, a 50-basis-point hike should even be considered."

"This signals the direction of the debate, although we do not expect such a drastic move to win majority support on the Federal Open Market Committee."

"We continue to believe that September’s single rate hike is not enough to bring inflation down meaningfully, especially with the economy still humming and unemployment low."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)