Matt Maley of Miller Tabak states that The Fed is prepared to gamble on the possibility of a recession to reduce inflation.

by | Apr 12, 2023 | Recession News | 20 comments

Matt Maley of Miller Tabak states that The Fed is prepared to gamble on the possibility of a recession to reduce inflation.




Matt Maley, Miller Tabak chief market strategist, joins ‘Closing Bell: Overtime’ to discuss his takeaways from the latest Fed statements and what it could mean for the markets. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

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The Federal Reserve is once again putting its focus on inflation, with some analysts warning that it is willing to risk a recession to bring it down. One such analyst is Matt Maley, Chief Market Strategist at Miller Tabak, who argues that the Fed’s actions could have negative consequences for the economy.

Maley argues that the Fed’s recent decision to raise interest rates has put the US economy in a precarious position. He argues that the rate hikes have tightened monetary policy and increased borrowing costs, which could lead to a slowdown in economic growth.

The Fed has raised interest rates four times since late 2015, and is expected to announce yet another rate hike at its September meeting. The central bank has said that the rate hikes are necessary to bring inflation back to its 2% target level.

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But Maley argues that the Fed’s focus on inflation is misguided. He believes that the central bank is overestimating the threat of inflation, and that the risk of a recession is much greater.

“The Fed has shown time and time again that it is willing to risk a recession to bring down inflation,” Maley wrote in a note to clients. “This could have serious consequences for the economy.”

Maley points out that the Fed has a track record of tightening monetary policy too quickly, which has led to recession in the past. He points to the central bank’s actions in 1937, when it raised interest rates to combat inflation, but ended up triggering a recession.

Maley also argues that the Fed’s rate hikes are putting pressure on emerging markets, which could have a ripple effect on the global economy. He highlights the turmoil in Turkey and Argentina, which has been exacerbated by the Fed’s actions.

“The Fed needs to be more cautious in its approach to policy, and take into account the potential risks to the economy,” Maley said.

Despite these concerns, the Fed has signaled that it is committed to raising interest rates in the coming months. Fed Chair Jay Powell has said that the central bank is “on track” to continue raising rates, and has dismissed concerns about the risk of recession.

However, some analysts argue that the Fed needs to be more proactive in addressing the risk of recession. They argue that the central bank should be more flexible in its approach to policy, and be prepared to reverse course if the economy shows signs of weakening.

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“The Fed needs to be more responsive to changes in the economy, and be prepared to adjust its policy accordingly,” said Robert Kaplan, President of the Dallas Fed.

Overall, the debate over the Fed’s policy stance is likely to continue in the coming months. With inflation still below the central bank’s target level, the Fed is likely to continue raising rates. But some analysts warn that the risk of recession is increasing, and that the Fed needs to be more cautious in its approach to policy.

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20 Comments

  1. Hafez Bd

    The #1 priority for everyone right now should be investing in non-government alternative income sources. specifically in light of the present global economic crisis. Nowadays, investments in stocks, oil, and virtual currencies are still appealing.

  2. Ava Worthington

    We really need help to survive in this Economy. The fin-Market;s have underperformed the U.S. economy as fear of inflation hammers the prices of stock;s and bonds. My portfoliio of $250k is down to $192k any recommendation;s to scale up my return;s during this crash will be highly appreciated.

  3. anon anon

    Or raise wages?

  4. J W

    People are struggling from inflation, everything is so expensive.

    Democrats and The Fed just cares about the stock market.

    Mark my words Democrats will go down in presidential election, just like the Mid Terms !!

  5. James fred

    The fact is that BTC symbolises the future of cryptocurrency, and traders are wondering if now is the best moment to trade, I feel you should examine the situation more closely before jumping to any conclusion. BTC's price has been fluctuating over the previous days, signaling that the market has become unstable and that is it impossible to anticipate whether it will go bearish or bullish. Others are patient, while others continue to trade with no risk. It all depends on the pattern you're trading and the source of your signal, i earned 8.4 BTC starting with 2 BTC in just a few weeks implementing Randy Douglas daily trades. I managed to collect more than tips and tricks.

  6. Joseph

    The market is the dems making money off false information

  7. Josh Hill

    I don't like inflation

  8. brian oleson

    keeps talking about 2008 , 2008 didnt have a pandemic but the 1920s sure did with all the similarities of today ofcourse they cant say we are going to see historic crash again 08/1929 …

  9. Emerson Star

    END THE FED! End the corruption! Fed = central banks! They steal your wealth. They steal your life.

  10. Uncol Dave

    They'll just call it "not a recession" like they did the last one.

  11. Frank Bruno

    The fed wants a recession in the worst way

  12. Jonie Gan

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  13. Joseph Plonder

    Every member of Biden's staff is a highly incompetent diversity hire. Ol' word salad.

  14. Joseph Plonder

    Biden and his staff are the worst ever! See, this is what you get when you value identity politics, intersectionalism, and affirmative action over actual competency. Damn Marxists!

  15. Marta Tavera

    Anularcritomonedawinnertronpsentensiasuisaentero

  16. Marta Tavera

    Suisacongresosero sentensiasuisafrentedominicanatodaenpresa

  17. Marta Tavera

    Conflitoynpuetodoble chaquira artitaenpresa doble

  18. John Dingle

    I don't believe Fed feels there's a risk to higher inflation. They're quite dovish. Even as 5 year inflation expectations are rising again. Fed will be perfectly content with 4% inflation. For few more years.

  19. Living Awake

    There is no other way to bring it down without risk. This is ridiculous.

  20. Madeagle

    BANKSTERS WIN , NOT MURICA

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