Goldman Sachs: If inflation does not cool down, the Federal Reserve is expected to raise interest rates as early as September

BlockBeats News, June 18 — Goldman Sachs Group Vice Chairman and former Dallas Federal Reserve President Kaplan said that if inflation continues to run high, the Federal Reserve may need to raise interest rates as early as September.

Kaplan said, "If the inflation data does not cool down between now and September, it would be wise for the Federal Reserve to take action in September or in the autumn. That would be the more prudent approach." After Federal Reserve Chair Walsh hinted that he remains focused on fighting inflation, the market shifted to a hawkish stance. Traders sold short-term government bonds, pushing up some yields. Walsh's remarks were reinforced by individual forecasts from Federal Reserve members, with half of them expecting rate hikes before the end of the year.

Kaplan said that if inflation remains stubborn, it indicates that monetary policy is still too accommodative. He also noted, "The Federal Reserve's policy actions are rarely a one-off move; rate hikes often come in a series of two or three. So I think if you act in September, you need to be prepared. There may be one or two more."