TS Lombard Global Macro Research (TS Lombard) economist Steven Blitz (Steven Blitz) said in an interview with the US Consumer News and Business Channel on the 8th that the Fed may not stop the interest rate hike cycle until after the US economic recession . The Fed said earlier that it may raise the federal funds rate to a higher-than-expected level at a faster pace depending on economic conditions.
Britz warned that the Fed may stop the rate hike cycle only after the Fed’s continuous rate hikes have led to a U.S. recession and a sharp rise in unemployment. He asserted that the U.S. economy will fall into recession due to the Fed’s continued interest rate hikes, and the unemployment rate will rise from 3.4% in January to over 4.5%, and may even hit 5.5%. Breez criticized Fed officials for not knowing where the ceiling for rate hikes is, because officials have no idea how and where inflation will fall before the economy slows.
On March 7, Fed Chairman Jerome Powell said at a hearing before the U.S. Senate that recent economic data means that the final level of interest rates may be higher than previously expected. pace.
Since entering the current cycle of interest rate hikes in March 2022, the Federal Reserve has raised interest rates by 450 basis points in total, but the level of inflation in the United States continues to remain high. The latest data from the U.S. Department of Commerce shows that the U.S. personal consumption expenditures price index rose 0.6% month-on-month in January this year, the highest increase since June last year. Data from the U.S. Department of Labor showed that the U.S. consumer price index rose 0.5% in January from the previous month, the highest increase since October last year.