Saturday, Sep 15, 2007
We've been saying this for a while now.
Bloomberg: Greenspan Sees Political Pressure on Fed as Inflation Picks Up
"To keep inflation under 2 percent, ``the Fed, given my scenario, would have to constrain monetary expansion so drastically that it could temporarily drive up interest rates into the double-digit range not seen since the days of Paul Volcker,'' Greenspan wrote."
Posted by planning4acrash @ 09:25 AM (431 views) Add Comment
4 Comments
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1. Ash4781 said...
"Greenspan helped guide the longest economic expansion in U.S. history, lasting from 1991 to 2001. Growth averaged a 3 percent annualized rate during the former Fed chief's time at the central bank."
to
"The Federal Reserve may need to double its benchmark interest rate to at least 10 percent by 2030 to contain inflation, sparking a political showdown that could challenge its independence,"
10% US rates. 1x% UK rates ?
2. whiteknight said...
Again, political pressure will lead to an external verdict on the currency.
3. Alan said...
I think political pressure in the US will cause it to increase its benchmark inflation target (allowing inflation to rise) as a way out of trouble. It will then drop IRs to allow temporary alleviation of suffering to the US borrowing community who are seeing their remortgage rates rise.
Will the UK follow this lead....odds on, I reckon.
Watch out for a new inflation target of 3.5% by Darling around Christmas....
4. denzil said...
Alan said:
>>Watch out for a new inflation target of 3.5% by Darling around Christmas....
Yes my friend, I agree. Will there be another IR hike? Currently I can't see it and see a cut more likely.
It's turning into a right old mess.