**[Double Warning: The Federal Reserve Should Raise Interest Rates, Anti-Inflation Credibility at Risk]** BlockBeats News, May 27: Citadel Securities stated that in the context of resurging inflation and a persistently overheated economy, the Federal Reserve should adjust its stance as soon as possible, or risk "falling behind the curve." The institution believes that current inflation, rather than the labor market, poses a greater risk to the U.S. economy. Citadel Securities pointed out that after the U.S.-Iran war drove up oil prices, the U.S. CPI rose 3.8% year-on-year in April, marking the largest inflation increase since 2023. Meanwhile, the AI investment boom and loose financial conditions are further stimulating economic growth. Their model indicates that the current interest rate is approaching the "neutral rate," which does not align with market expectations of strong economic expansion. Former New York Fed President Bill Dudley also warned that the Federal Reserve's credibility as an "anti-inflation fighter" is at risk. He noted that U.S. inflation has exceeded the 2% target for more than five consecutive years, and long-term inflation expectations are rising, with "almost no reason for rate cuts" at present. Dudley further stated that against the backdrop of the AI investment boom, expanding government debt, and doubts about the Fed's independence, market concerns about runaway inflation are intensifying. [Original Link]