‘US economy should be in full swing before Fed rate hikes’
It is critical for the American economy to be in full swing before the Federal Reserve starts to step on the monetary breaks and make rate hikes, an expert told Anadolu Agency on Thursday.
“I don’t think the Fed should begin to raise rates until it is clear the economy has returned to full employment and inflation will remain consistently above the Fed’s 2% target,” chief economist at Moody’s Analytics Mark Zandi said in an e-mail.
The Fed signaled Wednesday that it would raise interest rates in 2023 to tame rising inflation. Its federal funds’ rate projection for 2023 was revised up to 0.6%, which means it could have two rate hikes of 0.25% each.
The signal came despite there being 9.3 million unemployed workers in the US and Fed Chair Jerome Powell has repeatedly indicated in recent months that the central bank would wait until labor conditions improve and full employment is achieved.
The Federal Open Market Committee (FOMC)…