Analyst: Fighting Inflation Is Imperative, but the Fed May Overdo It

Odaily News: Neil Dutta, an analyst at Renaissance Macro Research, stated that the Federal Reserve has indeed been slow to act in combating inflation; moreover, investors still underestimate the degree of hawkishness the Fed may need to adopt.

Dutta noted that while fighting inflation is imperative, it also brings the risk that the Fed may "overdo it." "Inflation tends to be a lagging indicator, and the transmission of monetary policy also involves time lags," Dutta wrote. "If Waller is taken as a bellwether for the FOMC's stance, then today's situation serves as a warning: looking ahead to 2027, excessive tightening has become the primary risk."