UBS On-Air: Paul Donovan Daily Audio 'Does hiking rates work?'

Financial markets are focused on the US Federal Reserve policy decision this week. The focus is ‘how big is the hike?’ not ‘will hiking rates cut inflation?’. The Fed’s June policy errors included a focus on consumer price inflation. More and more of CPI is made up of prices that monetary policy has less and less influence over. The Fed is forced to create more disinflation and deflation in the areas where policy does have an influence.