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Analysis: Federal Reserves may face a dilemma regarding their dual mission
Svmuu News: Benjamin Louvet, an analyst at OFI Investment Management, stated in a report that the Federal Reserve may face a dilemma regarding its dual mandate of employment and inflation: should it raise interest rates to combat inflation, or lower them to support economic growth and employment? The head of the commodities division said: ““Since raising rates cannot alleviate supply shocks without harming economic growth, it seems unlikely that Federal Reserve will opt for a rate hike.” Furthermore, declining revenues in Gulf nations—major buyers of U.S. Treasuries—could also weaken U.S. debt financing and force Federal Reserve to lower interest rates or even resume bond purchases to support the economy. (Jin Shi)
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