SMBC Americas economist Joseph LaVorgna warns inflation risks may force the Fed to raise rates further this year.
A former Trump administration economist predicts the Federal Reserve may need to hike interest rates by at least 100 basis points or more this year. Joseph LaVorgna, Chief Economist for the Americas at SMBC Americas, cited lingering energy price pressures and supply-chain disruptions as key drivers of persistent inflation risks.
LaVorgna compared the current environment to post-Covid conditions, suggesting inflation could remain elevated longer than markets anticipate. His comments contrast with recent investor optimism, fueled by inline core PCE data and a tentative Iran ceasefire, which pushed U.S. stock indices to record highs on May 28.
The economist, who previously served as chief economist of the National Economic Council, argued that the Fed’s policy path may diverge from market expectations, potentially delaying rate cuts.