Federal Reserve officials raise concerns over persistent inflation and potential rate hikes

May 20, 2026, 6:05:53 PM UTC(5 hours ago)

Impact: High

Affected Assets

Recent economic data showing consumer and wholesale inflation exceeding forecasts has prompted traders to price in a 37 percent probability of a Federal Reserve rate hike before the end of the year
St. Louis Fed President Alberto Musalem warned that an extended period of high oil prices could raise underlying core inflation and increase the risk of de-anchoring inflation expectations
The Federal Open Market Committee maintained its benchmark interest rate in the 3.50 to 3.75 percent range during its recent meetings as policymakers grapple with persistent cost of living pressures
Market expectations have shifted significantly from anticipating rate cuts to preparing for a prolonged hold or potential rate increases to defend the central bank's credibility

*FED: MAJORITY SAW HIKE LIKELY WARRANTED IF INFLATION PERSISTS *FED: SOME WERE CONCERNED INFLATION EXPECTATIONS COULD DE-ANCHOR