US economic downturn could become ‘extremely dangerous’ as Fed risks crushing interest rate hike demand: Jodi Shelton
Judy Shelton, a former Federal Reserve nominee, warned Friday that the Fed’s anti-inflation strategy by raising interest rates could crush supply and make the country’s economic situation worse. On “Morning with Maria,” Shelton also criticized Treasury Secretary Janet Yellen for endorsing “wrong initiatives” such as more government spending policies and regulations.
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Judy Shelton: I think it can become very dangerous the longer it goes on, because if a file Fed Efforts to Crush Inflation Instead, they just squash the supply, you won’t see much improvement in inflation expectations, which the Fed will take as a signal that it needs to be tougher. And so they end up going higher and higher. And so I think we’re looking at the worst of all worlds – stagflation or stagflation. This is what we want to avoid. But I don’t see how they will come out of this. If you had the Secretary of the Treasury, Janet Yellen, in her comments yesterday also included notes praising the Inflation Reduction Act she knows best. She was in favor of the Green Agenda. She said the unfinished business of Biden administration It is raising taxes on the wealthy and corporations. These are exactly the wrong initiatives if you are trying to increase the supply. What we really need is less regulation, less taxes, better energy, better trade policies, and we need to expand the supply. Economic growth is not inflationary. Low unemployment is not inflationary. It is excessive financial spending.
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