The Fed Is Blind to Economic Risks
==========
History will not judge Jerome Powell’s Federal Reserve kindly. Inflation surged to June 2022’s multi-decade high of 9.1 percent. The Fed has stuck to a backward-looking monetary policy of high interest rates despite major economic risks. The Fed is downplaying the likelihood of a US regional bank crisis, causing mark-to-market losses on the banking system's bond and loan portfolios. The Fed is also blind to the risk of a significant deterioration in the external economic environment, including trouble in major countries and the risk of a widening of the Israel-Hamas war. The Chinese economy is slowing, Japan's fiscal day of reckoning is approaching, and France's political crisis is drawing attention to unsustainable public finances. Deglobalization is another risk that could disrupt international trade flows. If the Fed waits too long to cut interest rates, it will be too late to prevent a hard economic landing.
#FederalReserve #EconomicRisks #Inflation #InterestRates #BankingSystem #RegionalBankCrisis #CommercialPropertySector #ExternalEconomicEnvironment #China #Japan #France #Italy #Deglobalization
https://www.aei.org/economics/the-fed-is-blind-to-economic-risks/
American Enterprise Institute /
npub14z…4fwd3
2024-07-05 19:04:30
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wss://relay.nostr.band/allPublished at
2024-07-05 19:04:30Event JSON
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"content": "The Fed Is Blind to Economic Risks\n==========\n\nHistory will not judge Jerome Powell’s Federal Reserve kindly. Inflation surged to June 2022’s multi-decade high of 9.1 percent. The Fed has stuck to a backward-looking monetary policy of high interest rates despite major economic risks. The Fed is downplaying the likelihood of a US regional bank crisis, causing mark-to-market losses on the banking system's bond and loan portfolios. The Fed is also blind to the risk of a significant deterioration in the external economic environment, including trouble in major countries and the risk of a widening of the Israel-Hamas war. The Chinese economy is slowing, Japan's fiscal day of reckoning is approaching, and France's political crisis is drawing attention to unsustainable public finances. Deglobalization is another risk that could disrupt international trade flows. If the Fed waits too long to cut interest rates, it will be too late to prevent a hard economic landing.\n\n#FederalReserve #EconomicRisks #Inflation #InterestRates #BankingSystem #RegionalBankCrisis #CommercialPropertySector #ExternalEconomicEnvironment #China #Japan #France #Italy #Deglobalization\n\nhttps://www.aei.org/economics/the-fed-is-blind-to-economic-risks/",
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