Former New York Fed President Dudley: Ample reasons for rate hikes, potentially initiating a series of tightening measures.

BlockBeats news, September 15: Former New York Fed President Dudley said that the Fed's case for tightening monetary policy is now fully justified, and a September rate hike may not be a "one-off move," but the start of a series of consecutive rate increases.

Dudley pointed out that U.S. inflation continues to run above the Fed's 2% target, the labor market remains relatively stable, and core CPI rose 0.3% month-over-month in August, further dispelling market doubts about cooling inflation. In his view, the Fed is currently clearly偏离 its dual mandate on price stability, and inflation still faces further upside risks in the short term.

Dudley expects the Fed may indicate in its September Summary of Economic Projections (SEP) a median expectation of two cumulative rate hikes in 2026, each by 25 basis points. He also noted that over the past few decades, the probability of the Fed hiking again after a single rate increase has been as high as 85% to 90%, so the market should not regard this round of action as a "token effort."

In addition, Dudley believes that if Warsh raises rates decisively, it would also help prove his determination to curb inflation and the Fed's policy independence. He warned that Warsh should not "outsource" monetary policy to financial markets, and the future interest rate path should be determined by the Fed based on economic data and its own policy judgment, rather than catering to market expectations.