Several more Fed rate hikes on the way?

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August 05, 2005

Several more Fed rate hikes on the way?

Amey Stone

Jim Cooper is an economist and the editor of BusinessWeek's Business Outlook column. In this week's column, he points out how much stronger than expected the second half of the 2006 is turning out to be.

He also told me in a video interview we did for the Web site that he expected the Federal Reserve to keep raising short-term rates as a result. This point of view runs counter to the more bullish scenarios that have been propelling stock prices in recent weeks.

The market could suffer a serious setback in the next week (the Fed meets next Tuesday) if more investors come around to his view. Indeed, the market is falling today on worries that the strong payroll report is a harbinger of inflation (and may prompt more tightening by the Fed). Stay tuned...

12:23 PM

Economics

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