Today’s inflation report should extinguish any pretense that a pause in rate hikes will likely be appropriate by the end of summer, said Jason Pride, chief investment officer of private wealth at Glenmede.
Friday’s consumer-price index report for May — which showed the annual headline U.S. inflation rate climbing to 8.6% in May, with few signs of having peaked — is boosting the chances of a jumbo-sized rate increase by monetary-policy makers as soon as next week, and eliciting dire warnings that central bankers have completely lost control of prices.
“What we saw in this report which was disappointing and a little alarming is that the core reading, excluding food and energy, came in hotter than expected and that’s after we dropped off from a very high number for April 2021,” she said via phone. “This is a much more persistent and stickier kind of inflation that takes years to work through the system.”
A team at Goldman Sachs Group Inc. GS, -5.65%, led by Jan Hatzius, agreed with TD’s September assessment, by saying “we now expect the Fed to hike the funds rate by 50 bps in September , in addition to +50bp moves in June and in July.” May report was a `doozy’ “Today’s CPI report was a doozy,” said Tom Graff, head of investments at Facet Wealth.
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