DWS: debate on further Fed tightening is far from over
DWS chief US economist Christian Scherrmann says the Fed debate on more tightening continues as US inflation stalls rather than falls.
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what happened
Christian Scherrmann, DWS Chief U.S. Economist, says the debate over further tightening by the Fed is far from over. U.S. inflation is moving sideways rather than declining. Fed Chairman Warsh did not address the policy outlook at a recent appearance, while other Fed officials have kept sending mixed signals.
In a note, Scherrmann says the wide range of views suggests the committee is split on whether policy is already restrictive enough. He notes inflation remains uncomfortably high, but a softer labor market and stable core PCE expectations argue for patience. DWS therefore expects the Fed to hold rates unchanged in October while keeping a hawkish bias.
why it matters
For markets, the signal is that the Fed may keep rates high for longer. This supports Treasury yields and the dollar, while pressuring equities of companies sensitive to borrowing costs.
market impact
US Treasuries and dollar: a hawkish Fed tone supports yields and demand for the dollar
tags
instruments
sources
- Debate About Further Tightening by Fed Far From Over — Market Talk, 22 October 2026 at 03:34 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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