ING Sees One-Off Fed Rate Hike as Credibility Boost

ING is predicting a 25-basis-point rate hike from the Federal Reserve on September 16, but believes it will be a one-time move. The forecast comes after Chair Kevin Warsh emphasized inflation and full employment in his address at the Jackson Hole symposium.

The data since then has justified this decision, with August's jobs report coming in hotter than expected and headline inflation remaining above target at 3.4%.

ING thinks that financial markets are pricing too many further rate hikes after the initial move, but market and consumer inflation expectations remain in check while consumer confidence is at all-time lows.