#Fed #inflation #Ukraine #Russia
Oxford Economics Chief US Economist Kathy Bostjancic joins Yahoo Finance Live to discuss inflation’s trajectory as the Fed factors in the Russia-Ukraine conflict, interest rate hikes, consumer spending data, global growth rates, and the outlook on energy markets.
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The ongoing crisis in Ukraine has not only raised geopolitical concerns but also economic uncertainties. According to a prominent economist, this situation could exacerbate the inflation problem the Federal Reserve is already facing.
The statement comes at a time when concerns about rising inflation in the United States are already running high. The rapid recovery from the COVID-19 pandemic has fueled fears of overheating in the economy, prompting speculation about the Fed’s response.
Mohamed El-Erian, the chief economic advisor at Allianz, warns that the Ukraine crisis could further complicate the situation. In an interview, he stated, “The Fed has a big inflation problem, and that’s before we start looking at what happens in Ukraine.”
The Ukraine crisis poses a threat to global stability as tensions between Russia and Ukraine escalate. The potential fallout from this conflict could have wide-ranging implications, including economic consequences that ripple across the globe.
El-Erian emphasizes that any economic fallout from the Ukraine crisis would only add to the existing inflation concerns in the United States. The Fed has been grappling with rising prices as a result of massive fiscal and monetary stimulus measures aimed at combating the pandemic-induced economic downturn.
While higher inflation can often be a sign of a strong economy, it can also have negative impacts if left unchecked. Rising prices erode the purchasing power of consumers and erode profit margins for businesses. This can lead to a decrease in consumer spending and overall economic growth.
The Fed has been closely monitoring inflation indicators. They have repeatedly stated that the current bout of inflation is likely transitory, but critics argue that inflationary pressures could persist as the economy rebounds.
El-Erian suggests that if the Ukraine crisis escalates, it could exacerbate inflationary pressures in the United States. This could force the Federal Reserve to take preemptive action, such as reducing monetary stimulus or accelerating interest rate hikes.
However, any decision by the Fed also carries significant risks. Prematurely tightening monetary policy could potentially disrupt the economic recovery and undermine investor confidence. Striking the right balance between keeping inflation in check and supporting economic growth remains a delicate task for the central bank.
The Fed faces a challenging scenario where it must navigate both domestic inflation concerns and external geopolitical tensions. How it responds to these challenges will have a significant impact on the U.S. economy and global financial markets.
For now, it is crucial to closely monitor developments in the Ukraine crisis and its potential economic implications. The Fed’s next moves will undoubtedly be influenced by these factors as they strive to address the inflation problem while supporting a sustained and robust recovery.
WAR. Not crisis, or conflict. WAR. Call it what it is. Russia is waging a war against Ukraine. Rhetoric matters. Russia wants to change the rhetoric as part of their propaganda.
Call it for what it is- this inflation and economic crisis in the US is NOT a consequence of RussiaxUkranie mess, but a direct result of idiotic policies of the joke biden!!! And he continues to further destroy the economy by stopping leases to fuel companies and destroying the Keystone pipeline.
"Supply chain" is the new word for "transitory"
My housing went up $200 a month, gas for me $80.00 more per month, groceries around $50.00 more a month.
Fed and Government are criminals
Fed should increase by 75 basis points. If they do not tackle inflation at this stage, it will be a monster going forward
I predict that looting and stealing from stores will be off the chain soon! Whenever the time comes that people can't afford to feed their families….sh** will get ugly quick! It will be the likes of which nobody has ever seen!
the fed has a big inflation "problem" … you mean "goal"
I don't think you people truly understand how dire the current situation is. This could get biblical by next year. Wars and famine type.
U.S. interest payments on debt will close in on $800 billion in 2022. At 2% rates….
Us government revenue 2021 $4 trillion.
Us interest payments on debt $392 billion.
Can't afford higher rates. 4% rates and government is insolvent.
LOL,, its a joke,, consumer spending is very strong???,, My spending is almost 20% up eventhough I tried to save as much as I can, gas, groceries and all the items up 30-50% up, of course my spending is up to survice day by day not becuase I have tones of money for luxury shopping…
Dont worry they say its only transitory and no one could have ever seen it coming due to covid.
America is a rich country and we can afford it and its just an accident anyway haha.
Once General Brandon leads the troops into battle hes gonna fix inflation with more printing and debt. Hes like a modern day Braveheart but without racism!
If you didnt vote for General Brandon then you aint BLACK!
While Russia works out a new plan with Ukraine, inflation and covid haven't gone away.
UNIVERSAL BASIC INCOME !
Inflation is a problem. Price gouging is also a problem. Why then, is price gouging never addressed by corporate media? But, the FUD around inflation is never ending? 6-7 rate hikes? Scary! The price of a gallon of drinking water goes up 100%. Not even a mention.
Government cannot afford higher rates. $300 billion in interest for every 1%.
If Fed had any credibility, it's gone. We will get record inflation next year. As inflation comes roaring back.
2 day record rally came on the back of Mary Daly "this time is different".
Fed's policy to control inflation not with actual hikes, but with "talk" of hikes.
Fed has no plans to curb demand. Only inflation expectations. At least that's their "policy" regarding inflation. Rate hikes are a joke. Fed just waiting for inflation to decline.
0.50? 0.25? What does it matter? Fed doesn't care about financial conditions affecting inflation. Just inflation expectations. It's all psychology for fed. They believe.
Read Mary daly's "this time is different"
Fed plans on controlling inflation via inflation expectations. Not by rate hikes. Print as much money as you can, while only "talking" about lower inflation.