Former New York Fed president Bill Dudley criticized the Federal Reserve's recent decision to raise interest rates by 25 basis points. Speaking on September 17, he characterized the move as insufficient to combat persistent inflation effectively.
The FOMC meeting concluded on September 17, resulting in a target federal funds rate of 3.75%–4.00%. Dudley cited August's core CPI data, which showed a 0.3% month-over-month increase, as evidence that inflation remains above the 2% target.
Dudley anticipates two additional 25-basis-point hikes before the end of the year, noting that central bank tightening cycles rarely conclude with a single increase. The FOMC's own projections also suggest at least one more hike before 2026 ends.
Higher interest rates increase borrowing costs for corporations and keep mortgage rates elevated. Bond market yields are expected to rise if expectations for further hikes solidify, while stablecoin issuers like Circle and Tether may see improved revenue from reserve yields.
