Fed Must Keep Rate Hikes Coming Amid Persistent Inflation

The Federal Reserve will likely raise interest rates for a second consecutive meeting at the end of October. If it doesn't, another hike is expected in December to control inflation.

The rationale for higher interest rates remains strong: a healthy labor market, economic growth, and stubbornly high inflation.

Inflation data released yesterday showed that prices rose 0.3 percent in August, with the core index up by 0.2 percent year-over-year. While this is lower than expected, it's still too high to meet the Fed's target of 2 percent.

The financial press has been saying the Fed got some 'breathing space' from the softer-than-expected inflation data, but the author argues that the central bank should continue to tighten monetary policy until price stability is restored.