Questioning the Fed's Claims of Inflation

October 12, 2017 03:06 PM
 
 

The Federal Reserve had a policy-making meeting in September, and one of the main topics discussed was slow inflation. The next Fed meetings will be Oct. 31 and Nov. 1, but investors believe the next hike in interests will come in the final meeting of the year in December.

Chris Narayanan, president and CEO of Gladius Aratrum, thinks there could be two or three rate hikes in 2018. In terms of the macroeconomic picture, he isn’t seeing many signs the economy is doing well enough to put hike interest rates.

“We’re certainly seeing improvement in revenue top line growth,” he said. “Unemployment’s really low, but you know we’re not seeing the inflation indicators, at least the ones they have said they’ve looked at in the past.”

He said the Fed could act if there’s a fear the market could “overheat” quickly. While it could be an “unlikely event,” Narayanan said the Fed could take step in and make a preemptive hike.

So far in 2017, the Fed has raised interest rates twice.

Hear his comments on why the Fed needs to be cautious releasing some of their balance sheet on AgDay above.

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