Citadel Securities expects the Federal Reserve to raise interest rates this week - a surprise move that would bolster Chairman Kevin Warsh's credibility in the fight against inflation
Citadel Securities expects the Federal Reserve to raise interest rates this week - a surprise move that would bolster Chairman Kevin Warsh's credibility in the fight against inflation. Frank Flight, the agency's director of macro strategy, wrote in a report that a quarter-point rate hike on Wednesday would solidify Warsh's repeated pledge to restore price stability while signaling that policymakers no longer rely on signaling every policy move in advance. "The market may have once again underestimated the extent of the Fed's hawkish turn." This week's rate hike will "decisively end the era of forward guidance" and highlight the Fed's independence.