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Comment on Fed Rate Hike By Suman Bannerjee, CIO, Hedonova

On the surface, the decision to raise the rates by 75 basis points is in line with what was expected. But a careful reading of the accompanying statement reveals a slightly more hawkish Fed - one that’s more willing to act more aggressively in attempting to tame inflation, than in the last such meeting in June. An important change in the statement was the absence of any reference to supply chain disruptions which may indicate an easing of the supply chain issues that have contributed to inflation hitting a 40-year high. There is now a clear indication that the FOMC will impose another rate hike when it meets in September. I do think that rates going up to around 4% to 5% would tame inflation.

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