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Moody's Warns: Federal Reserves May Be Forced to Raise Interest Rates as Inflation Expectations Soar
Svmuu News: Mark Zandi, chief economist at Moody's, pointed out that although U.S. GDP has risen this year and the economy appears resilient, warning signs are already flashing. Under the leadership of new Chairman Kevin Warsh, the Federal Reserve may face problems because the Fed is currently unable to implement policies to boost the economy and support employment growth, i.e., interest rate cuts. During the Iran war, U.S. inflation expectations surged sharply. Zandi stated that if inflation expectations continue to rise, it could force the Fed to raise interest rates, even if it triggers a full-blown economic recession, because policymakers will prioritize controlling inflation.
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