Analysts: Although combating inflation is imperative, the Fed risks overdoing it.

On November 12, Neil Dutta, an analyst at Renaissance Macro Research, stated that the Federal Reserve has indeed lagged in combating inflation; furthermore, investors still underestimate the extent of the hawkish stance the Fed may need to adopt.

Dutta noted that while fighting inflation is imperative, it also carries the risk of the Fed "overshooting." "Inflation is often a lagging indicator, and there are also lags in monetary policy transmission," Dutta wrote. "If we consider Waller a barometer for FOMC sentiment, then today's situation serves as a warning: looking ahead to 2027, excessive tightening has become the primary risk." (Jin10)