Inflation in 2019 Could Be as High as 2.5%, Says Sit Fixed Income's Doty

The transcript discusses the Federal Reserve's plans to raise interest rates, with expectations of a rate hike on Wednesday and another in December. The Fed aims to reach a neutral funds rate, as the economy is strong and doesn't require additional support. The discussion also covers the late stage of the economic cycle, potential inflation effects from trade tensions, and how these factors influence policymaking. The possibility of inflation exceeding 2% is considered, with market reactions to different inflation scenarios being a concern. The Fed must balance its approach to avoid unsettling the bond or stock markets.

What factors are influencing the Federal Reserve's decision to raise interest rates?

How does the current economic activity relate to the Federal Reserve's stance on additional support or stimulus?

What potential effects could trade tensions have on inflation according to the discussion?

What are the implications of the Federal Reserve hinting at the need for interest rates above 3%?

In what ways might the Federal Reserve's approach to inflation impact the stock and bond markets?