Wall Street Fears the Fed Could Cause ‘Some Damage’
New York TimesDec 15, 2022Dec 15, 2022
The Federal Reserve's aggressive rate hiking cycle is going to cause serious damage to the economy, and its inflation targets are no longer credible. The Fed's current plan is going to push the US economy into a recession — they are underestimating the risk of recession while overestimating the risk of inflation as a way of justifying their hawkish rate increases.
Increased apartment building construction may lead to a decrease in rent, which could help lower inflation. That could pave the way for the Fed to ease up on its campaign to increase rates, which may also moderate mortgage rates. The Fed is carefully calibrating its approach based on rapidly changing conditions.