Moody's Warns: Fed May Be Forced to Raise Rates as Inflation Expectations Surge

Odaily Planet Daily News: Moody's Chief Economist Mark Zandi pointed out that although the U.S. GDP has increased this year and the economy appears resilient, warning signs are already flashing. The Federal Reserve, under the new leadership of Chairman Kevin Warsh, may face problems because the Fed is currently powerless to implement policies that would stimulate the economy and support job growth, namely, cutting interest rates. During the Iran war, U.S. inflation expectations surged sharply. Zandi stated that if inflation expectations continue to rise, it may force the Fed to raise interest rates, even if it triggers a full-blown economic recession, as policymakers will view controlling inflation as their top priority. (Jin Shi)