fed rate hikes won’t drive down inflation
Peter Cohan 11/2/22, Professor at Babson College, founding principal of Peter S. Cohan & Associates, a management consulting and venture capital firm, “Why Fed Interest Rate Increases Won’t Bring Inflation Down”, https://www.forbes.com/sites/petercohan/2022/11/02/why-fed-interest-rate-increases-wont-bring-inflation-down/?sh=55e51eb210c3
Jerome Powell — perhaps inspired by Solomon — decided to split the baby.
In his news conference after the Fed raised its Fed Funds rate by three-quarters of a percentage point, he said that the Fed might raise rates by half a percentage point in December but could keep raising interest rates above the 5% “terminal rate” the Fed had set in September, according to the .
In response to these comments, stocks tanked — with the Dow falling by 1.1%, the S&P declining about 2%, and the Nasdaq losing over 2.7%.
This looks like what is another triumph for the inflation hawks (proponents of tougher monetary policy) over the doves (advocates for softer tactics).