Fun

Fed President Warns of ‘Disastrous Results’ if the Fed Loosens Policy Prematurely — Says ‘Inflation Remains Too High’

News Feed - 2023-03-02 01:03:26

Fed President Warns of "Disastrous Results" if the Fed Loosens Policy Prematurely — Says "Inflation Remains Too High"


Federal Reserve Bank of Atlanta’s president has warned of disastrous economic consequences similar to those seen during the financial crisis of the 1970s if the Fed loosens its policy prematurely. Noting that “inflation remains too high,” he stressed: “We don’t want a repeat, so we must defeat inflation now.” Fed Officials on Rate Hikes and Inflation Fight


The president of the Federal Reserve Bank of Atlanta, Raphael Bostic, warned about “disastrous” economic consequences should the Fed loosens its policy prematurely in an essay published by the Atlanta Fed on Wednesday.


“I believe inflation remains too high,” he wrote, emphasizing the need for the Federal Open Market Committee (FOMC) to raise interest rates more aggressively. Commenting on a narrative that the Federal Reserve should consider “reversing its course of raising the federal funds rate lest we go too far and cause undue economic hardship,” Bostic opined: While that perspective is understandable, history teaches that if we ease up on inflation before it is thoroughly subdued, it can flare anew. That happened with disastrous results in the 1970s.


“After the FOMC loosened policy prematurely, it took about 15 years to bring inflation under control, and then only after the federal funds rate hit 20%,” the Atlanta Fed president warned. “We don’t want a repeat, so we must defeat inflation now.”


Bostic continued, “Now we must determine when inflation is irrevocably moving lower,” elaborating: We’re not there yet, and that is why I think we will need to raise the federal funds rate to between 5% and 5.25% and leave it there until well into 2024.


“This will allow tighter policy to filter through the economy and ultimately bring aggregate supply and aggregate demand into better balance and thus lower inflation,” he said.


Federal Reserve Bank of Minneapolis’ president, Neel Kashkari, also talked about interest rate hikes at a business event in Sioux Falls on Wednesday. Kashkari said he is “open-minded” about whether the Fed will raise interest rates by 25 or 50 basis points at the next FOMC meeting. Citing last month’s data of “higher inflation than we expected and a strong jobs report,” Kashkari said: These are concerning data points suggesting we’re not making progress as quickly as we’d like.


However, he cautioned against overreacting to “one month of data even if the data is troubling.” Tags in this story Fed, fed policy, FOMC, Neel Kashkari, raphael bostic


Do you think the Fed should be more aggressive in hiking interest rates to fight inflation? Let us know in the comments section below. Kevin Helms


A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Robert Kiyosaki Says World Economy on the Verge of Collapse — Warns of Bank Runs, Frozen Savings, Bail-Ins ECONOMICS | 7 hours ago Economist Peter Schiff Warns the Fed Could Be Fighting "Complete Economic Collapse" ECONOMICS | 1 day ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleRobert Kiyosaki Says World Economy on the Verge of Collapse — Warns of Bank Runs, Frozen Savings, Bail-Ins Next articleCerus Markets Launches its Mobile Trading App $10,000 Giveaway Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"


The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.Following a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days Draft Law Regulating Aspects of Crypto Taxation Submitted to Russian Parliament Bitcoin ATM Operator Indicted in New York Allegedly Running Illegal Business Attracting Criminals Iran to Increase Penalties for Unauthorized Cryptocurrency Mining

News Feed

Derek Andersen6 hours agoCZ post on X about Ceffu and Binance.US contradicts SEC claims, adds to confusion“It is more than likely that BAM still doesn’t understand what Ceffu is,” the SEC stated after trying to unt
Biggest Bank in El Salvador Now Accepts Bitcoin as Payment for Financial Products
Biggest Bank in El Salvador Now Accepts Bitcoin as Payment for Financial Products Bancoagricola, the biggest bank in El Salvador, is now accepting bitcoin to pay for debts originat
Bitcoin Price Breakdown Spurs Sell-Offs, Analyst Reveals What Will Happen If BTC Hits 92,800
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Dogecoin Open Interest Plunges 58%: How Do Shiba Inu & Pepe Compare?
Este artículo también está disponible en español. Data shows the Dogecoin Open Interest has seen a large drop recently. Here’s how the trend has compared for Shiba
Ernst & Young Launches Application to Help US Crypto Investors With Tax Filings
Ernst & Young Launches Application to Help US Crypto Investors With Tax FilingsErnst & Young (EY) has introduced a new application that helps U.S. cryptocurrency traders calculate a
Bitcoin Difficulty Increases 6% — It’s Still 48% Easier to Find BTC Blocks Than It Was 30 Days Ago
Bitcoin Difficulty Increases 6% — It"s Still 48% Easier to Find BTC Blocks Than It Was 30 Days Ago As expected, Bitcoin’s mining difficulty increased thi
Seasonal Tokens: Summer’s Price Rises After the Halving as Expected
Seasonal Tokens: Summer"s Price Rises After the Halving as Expected press release PRESS RELEASE.The Seasonal Tokens economy has gone through its second change of season. Like bitcoi
Algorithmic Bitcoin and Ethereum Social Attention List Ranks Influencers With Math
Algorithmic Bitcoin and Ethereum Social Attention List Ranks Influencers With Math On November 19, Hive.one, a project that maps the community clusters of Bitcoi
Brazil Registers Record Number of Institutions Declaring Cryptocurrency Holdings
Brazil Registers Record Number of Institutions Declaring Cryptocurrency Holdings Brazil registered its highest number of companies and institutions declaring ownership of cryptocur
Despite the Former FTX CEO’s Media Tour Many Unanswered Questions Remain
Despite the Former FTX CEO"s Media Tour Many Unanswered Questions Remain Former FTX CEO Sam Bankman-Fried (SBF) has been talking a lot more since his exchange collapsed a few weeks
Bored Ape Yacht Club Donates $1 Million in Ethereum to Ukraine Following Community Efforts
Bored Ape Yacht Club Donates $1 Million in Ethereum to Ukraine Following Community Efforts On March 8, the team behind the Bored Ape Yacht Club (BAYC) donated $1 million in ethereu
LBank Exchange Will List THN (Throne) on September 22, 2021
LBank Exchange Will List THN (Throne) on September 22, 2021 press release PRESS RELEASE. INTERNET CITY, DUBAI – LBank Exchange, a global digital asset trading platform, is pr