Former Fed vice chairman says he is worried that the Fed is not ready to deal with the threat of accelerating inflation

Original title: Former Fed Vice Chairman said he was worried that the Fed was not prepared to deal with the threat of accelerated inflation

Summary

[Former Fed Vice Chairman said he was worried that the Fed was not prepared to respond to the threat of accelerated inflation]On Tuesday, former Fed Vice Chairman Donald Kohn said he was worried that the Fed was not prepared to respond to the threat of accelerated inflation. Kohn said: “There is a risk of rising inflation.” (Zhitong Finance Network)

Tuesday, beforeMidlandVice Chairman Donald Kohn said he was worriedMidlandThe reserve is not prepared to deal with the threat of accelerating inflation. Kohn said: “There is a risk of rising inflation.”

In KohnMidlandChu has worked for 40 years, including 4 years as vice chairman. Kohn stated in a webinar hosted by the American Enterprise Institute that the newcurrencyThe framework increases the possibility of accelerated price increases. He pointed out that this framework is not designed to deal with the upside risks of inflation, which is the worrying part.

Kohn added that the danger is that the Fed will eventually have to increase further and fasterinterest rateTo control inflation.

Under the new policy framework, the Fed intends to push the inflation rate above its 2% target to make up for the failure to reach the target for many years. The new framework also declares that it will avoid raising interest rates solely to prevent the unemployment rate from falling to levels previously considered too low.

Kohn said he does not think the Fed should change its policy now, but he hopes that Fed officials will publicly acknowledge the risk of inflation they face and reflect it in the next quarterly economic forecast. “The Fed needs to be more open and honest about the actions it expects to take than I think they showed in the last round of economic forecasts. This is a constructive step in itself.”

The Federal Open Market Committee will release its latest economic forecast after its policy meeting next week.In March, most policymakers expected that the Fed would notinterest rateIncrease from the current level close to zero.

(Source: Zhitong Finance Network)

(Editor in charge: DF537)