Bedda, Switzerland: Markets may over-reflect Federal Reserve interest rate expectations

On 28 July, the Swiss Bedda wealth management pointed out that the market reflects an unusually high rate of interest rate hike. “Although we cannot completely rule out the risk of an unexpected increase, current market prices seem too high,” Xiao Cui, a senior American economist, said in a report. According to Cui, the latest United States inflation data and statements by Federal Reserve officials reinforced the expectation that the Fed would maintain interest rates at 3.5 to 3.75 per cent this week. She stated, however, that officials continued to view inflation as a more important policy risk, opening the door to tightening policies as early as September. Cui also argued that the Governor of the Regional Federal Reserve Bank, Logan and Hamark, might cast two negative votes in favour of 25 basis points, and that Kashkali might vote against a third。