Despite market pricing 85-90% odds of a Fed rate hike this week, some economists and former Fed officials argue the central bank might hold steady.
Former Cleveland Fed President Loretta Mester and economist Adam Posen suggest the Federal Reserve's decision on a rate hike this week could be a closer call than market expectations. Posen notes that a hike would require multiple board members to reverse recent dovish stances and could draw political criticism. This comes as August CPI rose 0.3%, higher than the expected 0.2%, reinforcing market expectations for a 25 basis point hike. Fed Chairman Kevin Warsh previously made a case for raising rates at Jackson Hole, citing June and July inflation reports.
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