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That's my fear. In other words, increasing interest rates may not address the cause of the current inflation, so now instead of one problem (inflation) we have
by jonny_eh 4y ago
That's my fear. In other words, increasing interest rates may not address the cause of the current inflation, so now instead of one problem (inflation) we have two (inflation + recession, aka stagflation).
- dageshi 4y agoUltimately consumer sentiment has a much bigger effect than just about everything else. The public are worried about inflation, it's the issue of the day. They will cut back spending until inflation is seen to be tackled which will likely bring about a recession anyway. Given that, the Fed's hand has been forced, if they do not seem to be aggressively trying to deal with inflation the public will become even more scared and reluctant to spend.