The stock market rallied after the inflation data for July came in lower than expected and showed a decline from the 40-year high hit in June. However, market strategists believe the Federal Reserve is unlikely to get distracted from its hawkish interest rate hikes as inflation remains elevated, and the economic data shows resilience.
According to Neel Kashkari, President of Minneapolis Federal Reserve Bank, the Fed is “far, far away from declaring victory” and needs to raise rates much higher, 3.9% by year-end and 4.4% by the end of 2023.
