Economists: Fed Rate Hikes Aimed at Appeasing Wall Street Rather Than Controlling Inflation

TechFlow reports that on September 13, according to CoinDesk, James Thorne, Chief Market Strategist at Wellington-Altus, stated that the Federal Reserve's upcoming policy tightening will primarily be aimed at pleasing Wall Street rather than addressing inflation.

Thorne noted that the current inflation outlook has not changed significantly, with year-over-year wage growth slowing to 3.1%, and no confirmed wage-price spiral or second-round inflation emerging, nor any evidence that energy shocks are being factored into the economy. He emphasized that interest rate hikes cannot produce oil, expand refining capacity, or repair disrupted supply chains; instead, they would reduce demand and household purchasing power. If the Fed raises rates merely to meet Wall Street futures market expectations, its prior commitment to eliminating forward guidance would lose its meaning.