Anticipated Fed Rate Hike Could Bolster Warsh's Credibility in Fight Against Inflation

Dow Jones09-15 21:02

1302 GMT - A rate hike by the Federal Reserve on Wednesday would reinforce the shift toward a more hawkish stance adopted by Chairman Kevin Warsh since the Jackson Hole symposium, bolstering his credibility in the fight against inflation and his independence from the administration, ClearBridge Investments' Jeff Schulze says in a note. With markets pricing in a greater than 90% probability of a September rate hike, "the Committee has little room to disappoint expectations," the head of market strategy says. "Warsh is likely to frame this [anticipated] hike as proof that the Committee is backing its words with action, reaffirm that no monetary policy path is set in stone, and avoid committing to a specific number of future rate hikes," Schulze says.

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