Fed's Rate Hike Cycle Has Peaked, Investment Banks Say

Per investment banks, Federal Reserve policy is now sufficiently restrictive to put inflation back on track to the central bank's 2% target and does not warrant additional rate hikes.

However, ING's Chief International Economist James Knightley doesn't expect the Fed to walk the talk.doesn't suggest any need for the renewed impetus for the Fed hiking interest rates again in September. The Fed has signaled a desire to tighten policy more slowly and the report appears consistent with the gradual cooling of the labor market," Knightley, said in a note to clients after Friday's payrolls report.

"The fact that banks anticipate tightening lending standards further in the second half of the year increases the likelihood of an additional drag on economic growth. This is something to be mindful of as the economy navigates the coming quarters," Wells Fargo's economic research team said in a note to clients on Friday.With the July rate hike to the 5.25%-5.

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