Updated
Updated · CNBC · Sep 1
Fed's Barr Backs Rate Hike if 3.7% Inflation Persists
Updated
Updated · CNBC · Sep 1

Fed's Barr Backs Rate Hike if 3.7% Inflation Persists

3 articles · Updated · CNBC · Sep 1

Summary

  • Michael Barr said he would support raising rates if inflation fails to moderate, sharpening expectations ahead of the Fed's next meeting in two weeks.
  • Inflation has stayed above the Fed's 2% target for nearly 5½ years, with the latest readings at 3.7% headline and 3.3% core, which Barr said risks broader price pressures taking hold.
  • Barr said the Fed could wait longer only if incoming data show a credible path back to 2%; one more round of CPI and PPI reports arrives next week.
  • Markets were already pricing about a 66% chance of a September increase after Chair Kevin Warsh's hawkish remarks, while 10-year Treasury yields climbed to their highest since mid-January 2025.

Insights

With consumer savings hiding the true pain of inflation, what hidden economic trigger will finally force the Fed to hike rates again?
Could the Fed's sudden interest in alternative inflation metrics be a covert strategy to avoid raising interest rates in 2026?
If inflation stays entrenched for a sixth year, will the central bank be forced to secretly abandon its long-held target?