According to Jin10, Joseph Lavorgna, chief U.S. economist at Sumitomo Mitsui Banking Corporation, said Federal Reserve policymakers could lose hard-won credibility if inflation fails to slow. He pointed to historical data from the past 70 years, saying core inflation has fallen by 0.9% year over year or more only six times. In each of those cases, he said, inflation cooled because the Fed tightened policy. Lavorgna also argued that the longer the central bank waits, the greater the chance that interest rates will rise above what is necessary. His remarks focus on the trade-off facing the Fed as it weighs inflation persistence against the risk of keeping policy restrictive for too long.
According to Jin10, Joseph Lavorgna, chief U.S. economist at Sumitomo Mitsui Banking Corporation, said Federal Reserve policymakers would lose hard-won credibility if inflation does not slow.
Lavorgna said that over the past 70 years, there have been only six instances in which core inflation fell by 0.9% year over year or more, and each time inflation slowed because the Federal Reserve tightened policy.
He added that the longer the Fed waits, the greater the probability that interest rates will rise above the level needed.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
