BNP Paribas: Fed Unlikely to Repeat 2022-2023 Rate Hike Cycle

BNP Paribas strategist Chi Lo stated that while the market expects two more rate hikes, the Fed's September move is unlikely to trigger a tightening cycle similar to 2022-2023. Instead, it may represent a preventive measure to reverse last year's three rate cuts and address inflation. Further hikes may not resolve external shocks like war or energy prices, but could bolster the Fed's anti-inflation credibility, though they carry the risk of pushing the economy into stagflation.