Federal Reserve Governor Michael Barr has indicated that a rate hike could be necessary if inflation does not decrease soon. The current PCE inflation remains above the Fed’s 2% target. Market pricing indicates a 70.5% probability of a rate hike in 2026, while the probability of a rate cut by September 2026 has dropped to 0.8%. This development is being closely watched by market participants as it may influence future monetary policy decisions.
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