Castle Securities expects the Federal Reserve to raise interest rates this week — an unexpected move that will strengthen Chairman Kevin Walsh's credibility in the fight against inflation. Frank Flite, the agency's head of macroeconomic strategy, wrote in a report that the 25 basis point hike on Wednesday would reinforce Walsh's repeated promises to restore price stability, while showing that policymakers no longer rely on sending signals for every policy move in advance. “The market may have once again underestimated the extent of the hawkish shift in the Federal Reserve.” This week's rate hike will “decisively end the era of forward-looking guidance” and highlight the independence of the Federal Reserve.

Castle Securities expects the Federal Reserve to raise interest rates this week — an unexpected move that will strengthen Chairman Kevin Walsh's credibility in the fight against inflation. Frank Flite, the agency's head of macroeconomic strategy, wrote in a report that the 25 basis point hike on Wednesday would reinforce Walsh's repeated promises to restore price stability, while showing that policymakers no longer rely on sending signals for every policy move in advance. “The market may have once again underestimated the extent of the hawkish shift in the Federal Reserve.” This week's rate hike will “decisively end the era of forward-looking guidance” and highlight the independence of the Federal Reserve.