JPMorgan chief U.S. economist Michael Feroli said he expects the Federal Reserve to deliver one more rate hike in December and then stop, rather than move into a prolonged tightening cycle. He tied that view to inflation being driven by supply shocks. Feroli also said the September rate increase helped preserve the Fed’s credibility, noting that Chair Kevin Warsh had repeatedly warned against tolerating inflation. At the same time, he argued there is a case for skipping an October hike because the September move needs time to work through the economy. Feroli added that Warsh has ordered five working groups to review the Fed’s policymaking process, with results due before year-end. The review will focus on whether to scrap the dot plot, push for a smaller Fed balance sheet, and study how AI could affect productivity and employment. The report was cited by BeInCrypto.
JPMorgan chief U.S. economist Michael Feroli said he expects the Federal Reserve to raise rates once more in December and then stop, rather than enter a prolonged tightening cycle.
Feroli said that call is based on the view that inflation is being pushed by supply shocks.
Feroli says October could be skipped
He said the September rate hike also helped preserve the Federal Reserve’s credibility, as Chair Kevin Warsh had repeatedly warned that inflation should not be tolerated.
Feroli also said there is reason to skip an October hike because the September increase needs time to pass through the economy.
Five working groups reviewing Fed policymaking
Feroli added that Warsh has ordered five working groups to review the Fed’s policymaking process, with the results set to be released before the end of the year.
The review will focus on:
- a possible removal of the dot plot;
- efforts to shrink the Federal Reserve’s balance sheet;
- research into AI’s impact on productivity and employment.
The report was attributed to BeInCrypto.
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