A hotter-than-expected September inflation reading has rattled financial markets, and investors now expect a 0.75 percentage point rate hike by the Fed in November and December. The Federal Reserve is strongly committed to control inflationary pressure.
“The more inflation comes in above expectations, the more they’re going to have to prove that commitment, which means higher interest rates and cooling in the underlying economy,” said Michelle Meyer, chief U.S. economist at the Mastercard Economics Institute. This is increasing the chances of an impending recession.
