Fed seen raising interest rates at every policy meeting until the fall

Get ready for steady Federal Reserve interest rate hikes as the U.S. inflation rate has climbed to 7.5% in the past 12 months.

That’s the view from markets in light of the stronger-than-expected consumer inflation data for January, said Subadra Rajappa, head of U.S. rates strategy at Societe Generale.

On Wednesday, Cleveland Fed President Loretta Mester laid out a game plan where the Fed starts with quarter-point rate hikes, with more aggressive moves on the table in the second half of the year if the high inflation reading persist. Neil Dutta, chief economist at Renaissance Macro Research, said if the Fed only raised its policy rate by a quarter-point on March 16, it would be a “dovish suprise.”Sal Guatieri, senior economist at BMO Capital Markets in Toronto said: “While this report, on its own, might not trigger a 50-bps inaugural rate hike from the Fed, the pressure will continue to mount if inflation doesn’t begin to rollover this spring as policymakers anticipate.

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