Should the Federal Reserve Raise Interest Rates or Not? Join the Debate.

[John O'Leary]

In light of recent events such as Silicon Valley Bank's collapse, some economists are now calling for the U.S. Federal Reserve to pause interest rate hikes or even cut rates to relieve stress on banks. However, with inflation still running high, others argue that such a reversal would do more harm than good. What is your opinion on whether the Federal Reserve should raise interest rates or not? Should we still expect the .25% increase? Share your thoughts in the comments below.

[Dylan Speer]

Hey John,

The only metric in yesterday's CPI that came in above target is shelter, more specifically rent. This is trending downward however and many drivers point to this trajectory continuing throughout the remainder of the year. Today's PPI report as well as consumer spending both revealed that producer inflationary pressures are easily rather rapidly while the consumer maintains a healthy and on-target level of spending. 

I'd be willing to bet we see either a pause or one final 25 bp hike. I think the FED has tangible evidence that their rate hikes are creating a true effect on the economy, which we did not previously see in last year's CPI reports. I think it's accurate to say that financial conditions are tight. I do not see FED hiking more than 50 bp if they plan on halting bank blowups.