Fed will need to hike rates to tackle inflation, says Fmr. Trump Special Assistant Joe Lavorgna

• Fed needs to hike rates because inflation won't come down on its own.
• Kevin Warsh missed an opportunity to hike earlier, which could have led to lower long-term rates.
• Interest rates, stocks, and the dollar are expected to be higher in the near-term.
• If core CPI dips tomorrow, the market might price out a September hike, making a November hike politically difficult unless data is 'super compelling'.
• LaVorgna expects the Fed to hike rates before the end of the year.

Joseph LaVorgna, Chief Economist at SMBC Americas, argues that the Federal Reserve needs to hike interest rates to combat persistent inflation, which he believes won't subside on its own. He suggests the Fed missed an opportunity to hike earlier and that future hikes will be necessary, potentially leading to higher interest rates, stocks, and a stronger dollar in the near term. The upcoming CPI report and subsequent economic data will be crucial for the Fed's September decision.