The Federal Reserve's surprise move to raise the discount rate is not likely to affect other interest rates but it shows inflation hawks are gaining ground, Giles Keating, head of Credit Suisse global economics and strategy, told CNBC Friday.
"In terms of day-to-day interest rates it has very little significance, it is symbolic, but I think the symbolism is important," Keating said.
Many Fed officials seem to be concerned that the central bank risks getting behind the curve, he explained.
"I think this is the signal that the Fed does have its eye on those longer-term risks and although it's very, very slow and this is just symbolic, they are just beginning to move that way," according to Keating.
Asian and European stocks fell in response to the move as investors fear it is precursory to global monetary tightening.
The Fed tried to reassure markets that the measure does not mean a tightening of money in the economy. But it signals a shift in the balance of power between doves and hawks, Keating said.
"There clearly is a debate, there's a disagreement within the Fed," he said "The timing is a little bit earlier that we thought, I think it shows there's a compromise, the hawks have just gained a little bit of ground."