Natixis Predicts Another Rate Hike, Citing Hawkish Fed Shift

Natixis economists believe the Federal Reserve may be leaning more hawkish than recent FOMC statements suggested, and that yesterday's rate hike could lead to another before the year is out.

Christopher Hodge and Selin Aker characterized the decision to raise rates for the first time since 2023 as 'the path of least resistance.'

'Staying on hold would further risk credibility,' they said. '50 might be overkill and tie the Fed's hands in the coming months.'

They pointed out that most FOMC members expect another hike to be needed in 2026, with Chair Warsh not submitting his projections due to his disbelief in forward guidance.