Post

#FedOfficialsDebateHikes Federal Reserve officials are debating how much further interest rates may need to rise. Boston Fed President Susan Collins said persistent inflation and renewed Middle East conflict supported the recent hike, while other policymakers remain focused on the risk of overtightening. The disagreement matters because markets are pricing a strong economy against elevated borrowing costs. If inflation remains high, the Fed may accept weaker asset prices in order to restore credibility. My view is that policy uncertainty will keep volatility elevated. Investors should focus on inflation, employment and energy data instead of assuming that the next hike is already fully priced.