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2026-05-27 00:57:58
[Castle Securities: Fed Should Shift to Rate Hikes Soon or It May Fall Behind] Castle Securities argues that the Federal Reserve should further shift its stance towards rate hikes as rising consumer prices become the main threat to the economy. Nohshad Shah, Head of Fixed Income Sales for Europe, the Middle East, and Africa (EMEA) at Castle Securities, stated, “Inflation is a greater risk than the labor market. The Fed should take note of this and adjust its stance as soon as possible to avoid falling behind.” He noted that the US stock market is rising, driven by the transformation brought about by artificial intelligence (AI), and financial conditions are easing. Large-scale investment spending surrounding AI is also further boosting economic growth. Castle Securities' models show that the Fed's current interest rate is close to a neutral level that neither stimulates nor inhibits economic growth. He stated that this stance is “inconsistent” with market price expectations of robust economic growth.
