Swonk Calls for September Rate Hike Amid Inflation Worries

Economist Diane Swonk says the Federal Reserve should hike its key interest rate at the September meeting due to inflation concerns. She bases this on recent employment data, which showed a strong job market with 162,000 new positions created in August.

However, Swonk notes that these numbers may be skewed by temporary factors such as the rehiring of education workers and the return of jobs in leisure and hospitality after the expiration of temporary protected status for Haitian workers. She also points out that while wages have increased 3.1% year-over-year, this is not necessarily reflected in median earnings.

Swonk believes that the Federal Reserve is still focused on inflation and may be hesitant to raise interest rates, but she thinks a September hike would be beneficial to control rising prices. The upcoming August consumer price report will be crucial in determining the Fed's decision.