Mizuho Bank: Fed may hike rates again in September due to inflation risks

Analysts at Mizuho Bank said in a note that U.S. inflation data due tonight are expected to show headline inflation rising at an annual rate, which could be enough to prompt the Federal Reserve to raise interest rates one last time in September.

Although the end of the Fed‘s rate hike cycle is drawing to a close, upside risks to the inflation outlook still need to be considered by the Fed, they said.

According to a survey, the annual rate of CPI in the United States is expected to rise to 3.3% in July from 3.0% in June, and the annual rate of core inflation is expected to remain unchanged at 4.8%.

Markets remain fairly skeptical that the Fed will raise rates again, but today’s data could put that view to the test, according to Mizuho Bank.