By Reuters
Bets rise on bigger Fed rate hikes as inflation sears
(Reuters) -Stubbornly hot U.S. inflation is fueling bets that the Federal Reserve will need to get more aggressive on interest rate hikes to cool price pressures, with chances of a 75-basis-point rate hike seen rising and the policy rate expected to top 3% by year end. Rising food and record gas prices pushed the consumer price index (CPI) up 8.6% last month from a year earlier, a U.S. Labor Department report showed Friday, shattering any hopes that inflation had peaked the prior month. Core CPI – which strips out volatile energy and food prices – rose 6%, down slightly from April’s 6.2% pace but far from the “clear and convincing” sign of cooling price pressures that Fed Chair Jerome Powell has said he needs to see before slowing rate hikes.
