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The United States could return to “a decade of inflation in the 1970s,” says Federal Reserve Banker Bullard.

https://sputniknews.com/20220620/us-could-return-to-inflation-decade-of-1970s-federal-reserve-banker-bullard-says-1096500450.html

The United States could return to “a decade of inflation in the 1970s,” says Federal Reserve Banker Bullard.

The United States could return to “a decade of inflation in the 1970s,” says Federal Reserve Banker Bullard.

Washington (Sputnik)-The United States could return to the non-fixed inflation style of the 1970s, and the Federal Reserve could take years to fix … 20.06.2022, Sputnik International

2022-06-20T19: 07 + 0000

2022-06-20T19: 07 + 0000

2022-06-20T19: 07 + 0000

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Inflation expectations were unwavering in the 1970s, and what the Fed would do to bring inflation back to low levels, in a speech prepared for a presentation at the Economic Conference in Barcelona, ​​St. Louis Fed President James Bullard said. It took years, “he said. Generally known in the United States as a decade of inflation. The average inflation rate over the last 10 years was 6.8%, which is twice the long-term average and almost three times the past 20 years. Similarly, current price pressures are above target, at the levels last seen in the 1970s and early 1980s, he said. “The federal government has responded by taking an important first step towards returning inflation to the 2% target,” said Mr. Bullard. Market rates are partly in response to promised federal action. It has risen significantly. ” The conditions necessary for the central bank to maintain price stability to prevent a temporary shock to inflation from affecting wage and price formation mechanisms Gita Gopinato, the first vice president of the International Monetary Fund Earlier this month, US inflation could exceed the Fed’s target longer than expected and be “unfixed” by expectations. Raised in 28 years to combat inflation, adding three-quarters of points, raising key lending rates from May’s peak of 1% to 1.75%. Inflation in the United States grew at an annual rate of 8.6, as shown by the Consumer Price Index. May% — More than four times the Fed’s target. The Federal Reserve has a favorable inflation rate of only 2% per year, which is as high as necessary to bring inflation back to its annual target and has vowed to raise interest rates for as long as necessary, but economists say I’m afraid that the Fed will boost the US economy. Recession due to rate hike. The US economy has already shown negative growth of 1.4% in the first quarter. If it doesn’t return to positive by the second quarter, the United States will be technically in recession. Given the two consecutive quarters of negative growth in the recession, Fed Chair Jerome Powell last week questioned whether the central bank could achieve the so-called soft landing of the U.S. economy. Nevertheless, banks were pushing the country towards recession.

https://sputniknews.com/20220618/crisis-decades-in-the-making-why-feds-rate-hikes-cant-save-the-day-for-us-economy–1096440903.html

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Washington (Sputnik)-Central Bank’s Missouri Regional Head in a speech on Monday, the United States could return to the unfixed inflation style of the 1970s, and the Federal Reserve will take years to fix. Said there is a possibility.

“In the 1970s, inflation expectations were solid and it took the Fed many years to bring inflation back to low levels,” St. Louis Fed President James Bullard said in a speech at an economic conference in Barcelona. Said.

The 1970s were commonly known as the decade of inflation in the United States. The average inflation rate over the last 10 years was 6.8%, which is twice the long-term average and almost three times the past 20 years.

“The real economy was also unstable in this process,” Bullard said, referring to that era.

Similarly, current price pressures are above target, at the levels last seen in the 1970s and early 1980s, he said.

“Without the Fed’s credible actions, US inflation expectations could be unwavering, leading to a new regime of high inflation and volatile real economic performance,” Bullard said. .. Market interest rates have risen significantly, in part, in response to the Fed’s promised actions. “

Stagnation or fixation of inflation expectations is a necessary condition for central banks to maintain price stability. This is to prevent a temporary shock to inflation from affecting wage and price formation mechanisms. Unlocking will have the opposite effect and will result in instability.

Earlier this month, Gita Gopinato, the first deputy managing director of the International Monetary Fund, said US inflation could exceed the Fed’s target longer than expected and could be “unfixed” to expectations.

Decades of Crisis: Why Fed Rate Hikees Can’t Save US Economic Day

The Federal Reserve last week announced the toughest US rate hike in 28 years to combat inflation, raising key lending rates from May’s peak of 1% to 1.75%, three-quarters of the point. Added.

Inflation in the United States grew at an annual rate of 8.6% in May, as the Consumer Price Index shows. This is more than four times the Fed’s goal. The Federal Reserve’s favorable inflation rate is only 2% per year, which is as high as necessary to bring inflation back to its annual target and pledges to raise interest rates as much as necessary.

But economists are afraid that the Fed will push the US economy into recession as it raises rates.

The US economy has already shown negative growth of 1.4% in the first quarter. If it doesn’t return to positive by the second quarter, the United States will be technically in recession, given that it will only take two consecutive quarters of negative growth to cause a recession.

Fed Chair Jerome Powell denied allegations last week that the central bank was pushing the country towards a recession, even though it questioned whether it could achieve the so-called soft landing of the U.S. economy. ..

https://sputniknews.com/20220620/us-could-return-to-inflation-decade-of-1970s-federal-reserve-banker-bullard-says-1096500450.html The United States could return to “a decade of inflation in the 1970s,” says Federal Reserve Banker Bullard.

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