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A rate hike is likely but has costs, Claudia Sahm warns

A rate hike is likely but has costs, Claudia Sahm warns
Rate hike seen as likely but costly

Claudia Sahm assesses that a rate hike is "quite likely" but cautions that it should not be seen as a "magic wand" and describes it as a "costly medicine."

She further notes that if policymakers surprise markets by holding rates without a clear explanation, it could lead to market volatility on Wednesday afternoon.

Sahm has previously called for Warsh to clarify details of his proposed Treasury-Fed Accord at Jackson Hole, referencing recent policy actions in her analysis (link). She also discussed the 2026 Jackson Hole Symposium agenda, with an emphasis on financial innovation and its role in payments and policy (link). Her commentary has tracked both policy proposals and upcoming shifts in central banking focus.

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