Economist explains why the Fed rate hike will be ‘catastrophically wrong’
As markets brace for a widely expected Federal Reserve interest rate increase, macroeconomist Henrik Zeberg has warned that the move would be a “catastrophically wrong” policy decision that risks further weakening an already slowing economy.
Ahead of the Federal Open Market Committee’s latest policy announcement, futures markets have assigned more than a 90% probability to a quarter-point rate increase from the current 3.50% to 3.75% range to 3.75% to 4%.
Expectations have been driven by persistent headline inflation linked to higher energy prices and hawkish signals from Fed Chair Kevin Warsh.
(Note: the interest rate increase is done, we’ll see what happens.)
