U.S. Markets Wrong To Claim Fed Will Stop Rate Hikes

Wednesday was a huge day for Fed-speak. A steady stream of central bank officials issued a coordinated message to Wall Street: Interest rates will need to stay higher for longer to bring down inflation, Nicole Goodkind reported for CNN.

Photo Insert: The market, again, was wrong to predict the end of interest rate increases.

Investors had largely come to the consensus that after raising rates only eight times in less than 12 years, the Fed was nearing the end of its tightening cycle. But January's super-strong jobs report, not to mention a slew of cautionary comments by Fed officials recently may erode the possibility of pivot.

The market, again, was wrong to predict the end of interest rate increases.

"We are determined to bring inflation down to our target," said Federal Reserve Governor Lisa Cook on Wednesday in Washington DC at an event hosted by the Joint Center for Policy and Economic Studies.

"So I think we are not done yet with raising interest rates, and we will need to keep interest rates sufficiently restrictive."

The services sector is still "hot," and the Fed needs to push its benchmark rate higher, Minneapolis Fed President Neel Kashkari said Wednesday at a Boston Economic Club event. He expects the fed funds rate to break above 5% this year, and once inflation gets closer to the Fed's 2% goal, the Fed will keep rates elevated for "possibly a long while."

Federal Reserve Bank of New York President John Williams said that another rate hike of a quarter percentage point "seems like the right size," on Wednesday during a discussion with the Wall Street Journal in New York.

"We still have our work cut out for us," he added.

"We are seeing that effort begin to pay off, but we have farther to go," said Federal Reserve Governor Christopher Waller on Wednesday at an agribusiness conference in Arkansas.

"And, it might be a long fight, with interest rates higher for longer than some are currently expecting. But I will not hesitate to do what is needed to get my job done."

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