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The Federal Reserve should hold its benchmark rate at 3.50% to 3.75% through 2026, Wells Fargo chief economist Tom Porcelli said, arguing that tariffs and energy costs are supply-side inflation drivers that rate hikes cannot address.
The call puts him at odds with Wall Street banks and a derivatives market that has priced in multiple increases before year-end.
The argument for staying put Porcelli made the case in an interview with CNBC, saying the Fed's rate tool cannot lower prices on goods affected by trade tariffs or ease supply constraints that drive energy costs.
Rate increases in this environment, he argued, would weigh on growth without reaching the actual source of pressure. "Raising rates is not a costless endeavor," he said.
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