The Fed has to hike interest rates this year, says SMBC's Joe Lavorgna

• June retail sales are holding up well, and jobless claims indicate a strong labor market.
• Inflation remains a core issue, with upward pressure on oil and gas prices expected to continue.
• The Federal Reserve is expected to raise interest rates this year to achieve price stability, as other tools are untested or less effective.

Former Treasury officials Natasha Sarin and Joe Lavorgna discuss the current state of the economy, highlighting persistent inflation despite strong retail sales and a robust labor market. Both agree the Federal Reserve will need to hike interest rates to combat inflation, emphasizing the Fed funds rate as the primary tool.