Inflation is currently the highest the world has seen in a generation, while tighter policy by the US Federal Reserve points to slowing growth and risks of recession, the world’s chief economist said on Friday. of Citi, Nathan Sheets.
“It’s (the Fed’s hawkish stance) emphasizing that tighter policy means slower growth and increased recession risks. These are the types of implications we face now,” he told CNBC-TV18.
Therefore, it’s unclear how much the Fed will need to raise rates to control inflation, he said.
His remarks came as the U.S. Fed set the tone with a 0.75% rate hike on Wednesday, its fifth increase since March, and half a dozen central banks from Indonesia to Norway followed suit. with rises of similar or identical size within hours, often posting tips. pointing to more action to come.
He said, however, that the good news is that in many countries household corporate balance sheets are in better shape than they were at the time of the global financial crisis. So many of those vulnerabilities don’t seem to be in play, he said.
Oil prices, he said, are still high, but not as high as they were three or four months ago. “It reflects some slowdown in global demand, particularly for goods, but the reality is that we still face geopolitical disruption,” he said.
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