Sunday, October 01, 2023
name of Prensa Latina
Bandera inglesa
English Edition
name of Prensa Latina



FED warns of rate hike impact on potential U.S. recession

Washington, Nov 9 (Prensa Latina) The Federal Reserve's fight to lower inflation "may lead to a downturn" as the central bank's interest rate increases are "challenged" by still-high consumer savings, still-tight labor markets and ongoing supply problems, Richmond Fed President Thomas Barkin said on Wednesday.

At an event held in Winchester, Virginia, Barkin noted that the raising interest rate policy is challenged by still-high consumer savings, still-tight labor markets and continuing supply-side problems.

Barkin said their tools to quiet demand and return inflation to their 2% target operate with a lag and have been challenged by the artificial elements of today´s environment.

“As a result, bringing supply and demand back into alignment may require still more from us, creating risk to the broader economy,” Barkin said. “Getting to normal may lead to a downturn.”

It is a risk the central bank will have to take, he said, to counter what he said would be an even worse outcome if inflation expectations begin to increase.

“If we back off for fear of a downturn, inflation comes back even stronger and requires even more restraint,” he said. The Fed “is not waiting around for things to settle on their own.”

The Fed raised interest rates last week by three quarters of a percentage point, its fourth large increase in what has become the fastest rate hiking cycle since the 1980s. Further increases are expected in coming Fed meetings, though the pace may slow as the central bank feels its way towards a peak level it considers high enough to bring inflation back to the 2% target from a level currently about triple that.


name of Prensa Latina

| Text SMS to 8100 with content PL
Receive 4 mesages x 25 cup

© 2016-2021 Prensa Latina
Latin American News Agency

Radio – Publications  – Videos – News by the minute.
All Rigts Reserved.

St. E No 454 , Vedado,  Habana, Cuba.
Phones: (+53) 7 838 3496, (+53) 7 838 3497, (+53) 7 838 3498, (+53) 7 838 3499
Prensa Latina © 2021 .

Web Site developed by IT Division  Prensa Latina.