{"id":18240,"date":"2023-03-02T04:36:40","date_gmt":"2023-03-02T04:36:40","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/fed-president-warns-of-disastrous-results-if-the-fed-loosens-policy-prematurely-says-inflation-remains-too-high-economics-bitcoin-news\/"},"modified":"2023-03-02T04:36:40","modified_gmt":"2023-03-02T04:36:40","slug":"fed-president-warns-of-disastrous-results-if-the-fed-loosens-policy-prematurely-says-inflation-remains-too-high-economics-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/fed-president-warns-of-disastrous-results-if-the-fed-loosens-policy-prematurely-says-inflation-remains-too-high-economics-bitcoin-news\/","title":{"rendered":"Fed President Warns of ‘Disastrous Results’ if the Fed Loosens Policy Prematurely \u2014 Says ‘Inflation Remains Too High’ \u2013 Economics Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Federal Reserve Bank of Atlanta\u2019s 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 \u201cinflation remains too high,\u201d he stressed: \u201cWe don\u2019t want a repeat, so we must defeat inflation now.\u201d<\/strong><\/p>\n

Fed Officials on Rate Hikes and Inflation Fight<\/h2>\n

The president of the Federal Reserve Bank of Atlanta, Raphael Bostic, warned about \u201cdisastrous\u201d economic consequences should the Fed loosens its policy prematurely in an essay published by the Atlanta Fed on Wednesday.<\/p>\n

\u201cI believe inflation remains too high,\u201d 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 \u201creversing its course of raising the federal funds rate lest we go too far and cause undue economic hardship,\u201d Bostic opined:<\/p>\n

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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.<\/p>\n<\/blockquote>\n

\u201cAfter 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%,\u201d the Atlanta Fed president warned. \u201cWe don\u2019t want a repeat, so we must defeat inflation now.\u201d<\/p>\n

Bostic continued, \u201cNow we must determine when inflation is irrevocably moving lower,\u201d elaborating:<\/p>\n

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We\u2019re 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.<\/p>\n<\/blockquote>\n

\u201cThis will allow tighter policy to filter through the economy and ultimately bring aggregate supply and aggregate demand into better balance and thus lower inflation,\u201d he said.<\/p>\n

Federal Reserve Bank of Minneapolis\u2019 president, Neel Kashkari, also talked about interest rate hikes at a business event in Sioux Falls on Wednesday. Kashkari said he is \u201copen-minded\u201d about whether the Fed will raise interest rates by 25 or 50 basis points at the next FOMC meeting. Citing last month\u2019s data of \u201chigher inflation than we expected and a strong jobs report,\u201d Kashkari said:<\/p>\n

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These are concerning data points suggesting we\u2019re not making progress as quickly as we\u2019d like.<\/p>\n<\/blockquote>\n

However, he cautioned against overreacting to \u201cone month of data even if the data is troubling.\u201d<\/p>\n

Do you think the Fed should be more aggressive in hiking interest rates to fight inflation? Let us know in the comments section below.<\/strong><\/em><\/p>\n

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\nKevin Helms <\/h6>\n

\nA 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.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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