U.S. economists: The Federal Reserve (FED) has excessively lowered interest rates, and the probability of the U.S. falling into stagflation is 65%.

GateUser-6433627c · 2025-04-18T10:55:18+00:00

The Federal Reserve (FED) of the United States has been accused of excessively cutting interest rates, with the risk of economic stagnation in the U.S. reaching as high as 65%, which may take several years to repair the damage. The Federal Reserve (FED) may struggle to keep up with inflation trends and may face pressure to raise interest rates in the future.

GateUser-6433627c

2025-04-18 10:55:18

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[American Economist: The Federal Reserve has overly lowered interest rates, and the probability of the U.S. falling into stagflation is 65%] Adam Posen, who has served at the Federal Reserve and the Central Bank of the United Kingdom, stated in a speech this week, “We may fall into recession, or we may not, but in any case, we will face inflation.” Currently serving as the director of the Peterson Institute for International Economics, Posen holds considerable influence and believes the likelihood of recession is 65%. As for the Federal Reserve, Boskin believes that considering the current still high level of inflation, it has overly cut interest rates. Once prices begin to rise again, the Federal Reserve may not be able to keep up with the pace of change. As a result, the Federal Reserve may be forced to quickly and significantly raise interest rates, putting additional pressure on the economy. If all of this becomes a reality, Boson said that repairing this damage may take years or longer.

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