The Mitsubishi UFJ abandoned the estimate that the Federal Reserve will keep interest rates unchanged this year, and the central bank is expected to raise interest rates by 25 basis points in September. The reasons why strategists George Goncalves and Agron Nicaj adjusted expectations include Federal Reserve Chairman Walsh's hawkish speech in Jackson Hole, steady employment data for August, and higher than expected CPI announced on Friday. The strategist wrote that raising interest rates may be a “policy mistake,” but with the market already expecting the Fed to raise interest rates next week, it is difficult for the Fed to choose to stay on hold. They said: “Given that Walsh has repeatedly emphasized that 'inflation is an option', it will cause problems if he does nothing”. The Mitsubishi UFJ anticipates that after the September rate hike, the Federal Reserve will keep interest rates unchanged in October. It believes that officials are unlikely to send a signal to actively advance the austerity cycle before the midterm elections. According to strategists, the probability of another rate hike in December is 55%-60%.

The Mitsubishi UFJ abandoned the estimate that the Federal Reserve will keep interest rates unchanged this year, and the central bank is expected to raise interest rates by 25 basis points in September. The reasons why strategists George Goncalves and Agron Nicaj adjusted expectations include Federal Reserve Chairman Walsh's hawkish speech in Jackson Hole, steady employment data for August, and higher than expected CPI announced on Friday. The strategist wrote that raising interest rates may be a “policy mistake,” but with the market already expecting the Fed to raise interest rates next week, it is difficult for the Fed to choose to stay on hold. They said: “Given that Walsh has repeatedly emphasized that 'inflation is an option', it will cause problems if he does nothing”. The Mitsubishi UFJ anticipates that after the September rate hike, the Federal Reserve will keep interest rates unchanged in October. It believes that officials are unlikely to send a signal to actively advance the austerity cycle before the midterm elections. According to strategists, the probability of another rate hike in December is 55%-60%.