CEA chairman says Fed rate hike would be a mistake

  • Christopher Phelan said the Federal Reserve should not raise interest rates today.
  • Inflation has declined across major gauges during the past three months, he said.
  • The FOMC held rates by a nine-to-three vote at its July meeting.

Christopher Phelan, chairman of the Council of Economic Advisers (CEA), said the Federal Reserve should not raise interest rates at its decision today, arguing that inflation has declined across major measures over the past three months. He cited the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) index, and said the Fed had refrained from hiking rates months ago when inflation was higher. The Federal Open Market Committee (FOMC), the Fed’s rate-setting body, is meeting this week. Phelan’s view contrasts with President Donald Trump’s public calls for lower rates and comes as markets assign rising odds to a hike, which traders see as a potential headwind for Bitcoin and other risk assets. Fed Chairman Kevin Warsh has said the cheap-money era is ending and indicated that inflation remains an unresolved issue. The committee may again be closely divided after holding rates steady by a nine-to-three vote at its July meeting. Markets will focus on Warsh’s press conference for signals about the final decision.

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CEA chairman says Fed rate hike would be a mistake - CoinPost Terminal