Société Générale: The Fed is Unlikely to Repeat the Rate Hike Cycle

Société Générale strategist Chi Lo stated that although the market expects the Federal Reserve to raise interest rates twice, the hike in September is unlikely to initiate a new tightening cycle similar to that of 2022 to 2023. This rate increase may mark the beginning of a "preventive rate hike" aimed at bringing inflation back to target levels by reversing last year's three rate cuts. Further rate hikes cannot address external shocks from war and energy prices, but they may alleviate market concerns about the Fed's anti-inflation credibility. The Fed cannot ignore recurring shocks or those that fail to dissipate as expected. However, additional rate hikes could suppress inflationary pressures by slowing activity in other areas of the economy, potentially pushing the economy into the risk of stagflation.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.