JPMorgan’s Aliaga predicts rate hike will bolster Fed credibility

The Federal Reserve might finally do something it hasn’t done in three years: raise interest rates. Stephanie Aliaga, Global Market Strategist at JPMorgan Asset Management, told Bloomberg’s “Open Interest” that a September rate hike would go a long way toward restoring the central bank’s credibility on inflation, which has spent more than five years stubbornly above the 2% target. As of September 10, 2026, futures markets are pricing in roughly a 70% chance of a 25-basis-point increase at the upcoming September 15-16 FOMC meeting. If it happens, the federal funds rate would move from the current 3.50%-3.75% range to 3.75%-4.00%, marking the first tightening move since 2023. The July dissent that changed the conversation The groundwork for this moment was laid in July, when the FOMC voted to hold rates steady at 3.50%-3.75%. That decision came with a notable asterisk: three regional Fed presidents dissented in favor of a hike. Three-way dissents are rare. The last time that many FOMC members broke ranks on the same side was 2016. The dissenters had a point that’s hard to argue with. PCE inflation, the Fed’s preferred gauge, has been running above 3% year-over-year. Supply chain disr...