Fed officials debate faster rate hikes as markets bet on a December increase
Governor Christopher Waller floated a possible half-point hike in December, while Fed officials Michelle Bowman and Anna Paulson back a gradual pace.
The is weighing how fast to raise interest rates after a hotter-than-expected October report. The Fed raised rates by a quarter point in September, its first hike since 2023, then held them steady at its October meeting. Consumer prices rose 0.4% in October, above the 0.3% economists expected.
Core prices rose 0.3%. Before the report, Fed governor Christopher Waller said a core reading of around 0.3% or more could call for a stronger move, possibly a half-point hike in December. After the report, Dallas Fed president Lorie Logan said the Fed may need to speed up and will need at least two more quarter-point increases.
Chicago Fed president Austan Goolsbee called inflation readings "borderline disturbing." Others favor a gradual pace. Michelle Bowman, the Fed's vice chair for supervision, said the benefit of more tightening must be weighed against its costs for rate-sensitive sectors.
Philadelphia Fed president Anna Paulson endorsed the gradual approach. The 10-year yield rose above 5%. CNBC reports the Fed's final meeting is Dec. 8 and cites CME FedWatch for almost 88% of traders expecting another quarter-point hike.
- 0.4%October monthly rise in consumer prices, against 0.3% predicted by economistsCNBC
- 0.3%October rise in core pricesThe Boston Globe
- Almost 88%traders expecting another 25-basis-point hike next month, per CME FedWatchCNBC
- 17 basis pointsTuesday's surge in the two-year Treasury yield, per AxiosAxios
- around 4 percentoverall prices versus a year earlier, per the New York Times as cited by ReasonReason
Three sides of the story
9 news outlets reported this · Little coverage from conservative outlets
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Liberal4 outlets
A divided Fed and stubborn, spreading inflation
CNBC opens with a turnaround: the Fed began the year hopeful that inflation was easing, raised rates in September, and is now "bracing for another inflation fight." It cites almost 88% of traders expecting a quarter-point hike next month and quotes OCBC's Chester Liaw, who sees a quarter-point as sufficient for December, and PGIM's Robert Sockin, who expects the Fed to raise rates by 100 basis points, starting in December. Axios frames a "tougher inflation fight" with "no clear endpoint in sight," pointing to Cleveland Fed and Atlanta Fed price measures and surging Treasury yields.
It also gives the case for caution from Michelle Bowman and Cleveland Fed president Beth Hammack. The Boston Globe, running a New York Times article, centers on officials divided over the pace. It quotes Deutsche Bank's Matthew Luzzetti and Waller, who said sticking to quarter-points would "put our credibility at risk."
Center4 outlets
Fed likely to hike, pace still uncertain
Reason's newsletter item "Rate Hike?" opens by saying the Fed "looks likely to raise rates." It cites the New York Times for the October figures: overall prices around 4 percent above a year earlier, up from 3.7 percent in September, and core prices up about 2.8 percent. It notes that Kevin Warsh replaced Jerome Powell as chair in May and that the board has favored very gradual increases since.
Reason calls the December meeting "rather telling" on how aggressively the Fed will act, and quotes Deutsche Bank's Matthew Luzzetti, who favors a "somewhat quicker pace." MarketWatch runs two pieces. One says Chairman Warsh has vowed the Fed will defeat high inflation, but "the death blows won’t come fast or easy."
The other reports that Goldman Sachs is changing its Fed interest-rate forecast and now expects more Fed rate increases following Tuesday's October inflation report.
Conservative1 outlet
The Fed's next move and young Americans
The Daily Caller headlines its piece "Fed’s Likely Next Move Points To Dark Cloud Looming Over Young Americans." It carries the line "The Fed’s policy rate is a key driver of the overall interest-rate environment."
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The Boston Globe, running a New York Times article, reports that after the inflation report, the 10-year yield on Treasuries, which anchors , business loans and many other debts, topped 5%. Axios reports that traders now price in two additional quarter-point hikes by June. CNBC reports the Fed's final meeting is Dec. 8.
All sources: 10 articles from 9 outlets
Liberal (4)
- Axios: Fed faces tougher inflation fight as pressure builds for more rate hikes
- CBS News: Inflation isn't going away. Here's what that means for interest rates.
- CNBC: The Fed expected rate cuts this year. Now it’s bracing for another inflation fight
- The Boston Globe: The Fed has to raise rates. How fast to go has officials divided.
Center (5)
- Forbes: Could The Fed Raise Interest Rates By 50 Basis Points In December?
- MarketWatch: U.S. inflation is already bad enough. It might get worse.
- MarketWatch: Why Goldman Sachs is now changing its Federal Reserve interest-rate forecast
- Reason: Rate Hike?
- The Wall Street Journal: Nvidia Succession Shows Key Part of CFOs’ Jobs: Serving as On-Call CEOs in a Pinch
Conservative (1)
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