The Fed should be hiking rates, not cutting - Creative Planning's Charlie Bilello

[wood block of Question mark with percentage change to UP and Down arrow. Interest rate, GDP, stocks market, financial, deflation and Inflation, ranking, mortgage, debt, Loan and Economic Recession]

The Federal Reserve should be hiking interest rates, not cutting them, according to Charlie Bilello, chief market strategist at Creative Planning, as the central bank is struggling with taming inflation.

The U.S. core PCE inflation rate has risen 2.9% year-over-year in July, which is the highest since February, after continuously rising since April.

[U.S. core PCE inflation rate ]
U.S. core PCE inflation rate (Creative Planning, Charlie Bilello)

However, the market is pricing in 87.1% of an interest rate cut, according to the CME FedWatch tool [https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html].

“The Fed has lost all credibility when it comes to fighting inflation,” said Bilello in an X post (formerly Twitter). “They should be hiking rates, not cutting.”

Bilello previously said that monetary policy should remain tight until the additional inflation seen since the start of 2020 – with 4% annualized CPI since January 2020 – is erased.

On Thursday, the S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) reached another all-time high, topping the 6,500 level, as investors have pushed through tariff uncertainty and even threats to the Federal Reserve’s independence.

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