Castle Securities: The Federal Reserve should quickly switch to raising interest rates, otherwise it may fall behind the situation.

Castle Securities says that as rising consumer prices become the main threat to the economy, the Federal Reserve should further shift towards a tightening stance. Nohshad Shah, head of fixed income sales for Castle Securities in Europe, the Middle East, and Africa, said, "Inflation is a bigger risk compared to the labor market. The Federal Reserve should take note of this and adjust its stance quickly to avoid falling behind the situation." He stated that with the rise in the US stock market driven by the AI revolution, financial conditions are becoming looser. Massive investments in AI are also further driving economic growth. Castle Securities' model shows that current Federal Reserve rates are close to a neutral level that neither stimulates nor inhibits economic growth. He stated that this stance is "inconsistent" with market pricing reflecting expectations for stable economic growth.