The situation is good for the US Federal Reserve to raise interest rates sharply, as the economy is strong enough to continue growing despite the cost of borrowing, said Fed Chairman Christopher Waller.
“Now is the time to do it. You want to do this when the economy is strong,” Waller told the Fed in Minneapolis.
At the same time, he warned that if the Fed delays interest rate hikes, the economy could lose momentum and unemployment could rise.
As Waller put it, “In my opinion, do it now, load it forward, complete it, and then we will judge how the economy is doing.”
He added that the Fed is aware of the magnitude of the damage that could occur if it does not take seriously the effort to reduce inflation.
As Kr. Waller, the Fed is attempting a “soft landing” in which growth will continue despite rising bank interest rates.
According to him, many people think of former Fed President Paul Volker in the early 1980s, when the Fed caused a sharp recession to tame inflation.
But the difference, he said, between today and the Volker era is that inflation was out of control for almost a decade.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.