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

Odaily Planet Daily News Moody's Chief Economist Mark Zandi pointed out that while US GDP has increased this year and the economy appears resilient, warning signs are already flashing. The Federal Reserve, under new Chairman Kevin Warsh, may face issues because the Fed is currently unable to implement policies to boost the economy and support job growth, i.e., cutting interest rates. During the Iran war, US inflation expectations surged sharply. Zandi stated that if inflation expectations continue to climb, it could force the Fed to raise interest rates, even if it triggers a full-blown economic recession, as policymakers will prioritize controlling inflation as their primary task. (Jin Shi)