[Former New York Fed President Dudley: Strong Case for Rate Hikes, May Signal Start of Tightening Cycle] BlockBeats News, September 15, former New York Federal Reserve President Dudley stated that the Federal Reserve currently has a very strong case for tightening monetary policy. The rate hike in September may not be a 'one-off action' but rather the beginning of a series of consecutive hikes. Dudley pointed out that the U.S. inflation rate remains persistently above the Fed's 2% target, the labor market is still relatively stable, and the core CPI in August rose 0.3% month-on-month, further dispelling market doubts about cooling inflation. In his view, the Fed is clearly deviating from its dual mandate goal in terms of price stability, and there remains a short-term risk of further inflationary pressures. Dudley predicts that the Fed may indicate in the Summary of Economic Projections (SEP) released in September a median expectation of two cumulative rate hikes by 2026, each by 25 basis points. He also noted that over the past few decades, the probability of the Fed raising rates again after a single hike has been as high as 85% to 90%, so the market should not view this round of action as 'tentative.' Additionally, Dudley believes that if Waller decisively raises rates, it would help demonstrate his determination to curb inflation and reinforce the Fed's policy independence. He warned that Waller should not 'outsource' monetary policy to financial markets. The future path of interest rates should be determined by the Fed based on economic data and its own policy judgments, rather than catering to market expectations. [Original Link]