---
title: "Raging inflation shatters market dreams! Will the Federal Reserve not cut interest rates in June, and possibly even raise them?"
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/201685877.md"
description: "Former US Treasury Secretary Lawrence Summers said that the rise in the US Consumer Price Index (CPI) in March could mean that the Federal Reserve may raise interest rates. He believes that a rate cut in June could be a mistake, leading to a possible downturn in the financial markets. Goldman Sachs Chief Economist Jan Hatzius has postponed the timing of the first rate cut to July and expects the Fed to cut rates twice this year. He stated that the committee will need to see sustained strong inflation data and prolonged weak data"
datetime: "2024-04-11T02:10:04.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/201685877.md)
  - [en](https://longbridge.com/en/news/201685877.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/201685877.md)
---

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# Raging inflation shatters market dreams! Will the Federal Reserve not cut interest rates in June, and possibly even raise them?

According to the Wise Finance APP, Lawrence Summers, former US Treasury Secretary, stated that the hot US March Consumer Price Index (CPI) implies that the risk of the next Fed rate hike must be taken seriously.

"You must seriously consider the possibility of a rate hike next time instead of a rate cut," Summers said. He pointed out that this possibility is between 15% and 25%.

Before Summers made his remarks, data released on Wednesday showed that both the US March CPI and core CPI exceeded economists' expectations. He emphasized that the so-called "super core services" indicator that Fed policymakers are focusing on - excluding food and energy as well as housing costs - is accelerating.

"Based on the current facts, in my view, a rate cut in June would be a dangerous and shocking mistake, similar to the one the Fed made in the summer of 2021," Summers said. "We don't need a rate cut now."

Summers noted that by June, the situation could still change, economic indicators could reverse, and financial markets could decline. He stated that the possibility of a rate cut by the Fed this year remains high, "but not as high as the market is pricing in."

It is worth noting that Jan Hatzius, Chief Economist at Goldman Sachs, postponed the Fed's first rate cut from June to July after the inflation data was released.

Goldman Sachs now expects the Fed to cut rates twice this year, down from the previous expectation of three rate cuts.

Hatzius said, "We still expect to cut rates at a pace of 25 basis points thereafter, which means there will be two rate cuts in 2024... in July and November."

Hatzius added, "There is already a slight divergence within the Federal Open Market Committee (FOMC) on the three rate cuts benchmark in 2024, and we believe the committee will need to see continued strong inflation data from January to March, followed by a series of softer data in the subsequent months."

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