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Sunday, August 28, 2022

FED will continue to be hawkish until inflation is under controlled.

We are not surprised by the FED's hawkishness because we've stated that the fed rate hikes are not working.  Therefore, the FED must do more to contain US inflation.

What will happen when the FED continues its hawkishness?

Well, the FED's hawkishness will induce a recession as portrayed by an economic model.

As stated by the economic model, there will only be a marginal decline in inflation.  To a certain extent, US inflation is declining marginally now but it will remain above the neutral rate.

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