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Fed Bostic Beware of Rate Hikes, President Biden Blames Higher Prices for Covid-19 and Putin

All eyes are on the U.S. Federal Reserve's plans for fixing the situation as inflation continues to wreck havoc on everyday American lives. 

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Fed Bostic Beware of Rate Hikes, President Biden Blames Higher Prices for Covid-19 and Putin

Raphael Bostic, president of the Atlanta Fed, believes that the central bank should be cautious as James Bullard, the president of the St. Louis Fed, wants to raise the benchmark interest rate aggressively.

Raphael Bostic, President of Atlanta Fed: "The Fed Must Be Cautious As We Move Forward"

After two years of inefficiencies that have plagued America's wealth, the U.S. economy is looking bleak. The blame has been placed on the inconsistent spending decisions by public policymakers, Federal Reserve's massive monetary expansion during the last two years and the supply chain shock from aggressiveCovid-19 lockdown procedures. This is all due to the current Ukraine-Russia conflict, which has resulted in the tightest sanctioned economic in many decades. These factors have resulted in the highest rising inflation rate that the U.S. has witnessed in more than 40 years.

Monday's Federal Reserve Bank of St. Louis president James Bullard explained how the Fed could raise the benchmark bank interest rates to 3.5% before the year ends. Bullard suggested an aggressive rate hike, which could lead to the rate increasing by 75 basis points, as did Alan Greenspan in 1994.

Bullard's intentions aside, a report by Wall Street Journal authors Jon Hilsenrath & Nick Timiraos on Monday stated that "the Fed had never successfully solved a problem like that." The report was written by Jon Hilsenrath & Nick Timiraos and noted that "many factors are beyond [the Fed's] reach" and that they are "stunningly behind."

Bullard is keen to increase rates dramatically, but Raphael Bostic, president of the Atlanta Fed, has expressed concern about raising the benchmark interest rate too aggressively. On Tuesday, Bostic stated to Sara Eisen of CNBC that he believes maintaining neutrality is also a top priority.

Bostic said, "I believe I'm in similar areas as my coworkers philosophically." "I believe it's really important we get to neutral, and do that in a expeditious manner," Bostic said. However, Bostic is envisioning a neutral benchmark rate that's different from Bullard's 3.5% by the end of Q4 2022. The Atlanta Fed president stated that he could see it as low as 1.75%.

Bostic stated that he really had us looking at one to three quarters by the end the year. However, it could be slower depending upon how the economy develops. "We do see more weakening than I am seeing in my baseline model," Bostic said during the interview. "This is why I hesitate to declare that we want go a long distance beyond our neutral point, as that could lead to more hikes than necessary given the economic environment."

Atlanta Fed President added:

As we move forward, [the Fed] must be careful. While we need to move away from zero, I believe zero is too low right now. However, it is important to pay attention.

US President Joe Biden Blames Russia's Vladimir Putin and the Covid-19 Pandemic for High Prices

Many are skeptical that the U.S. central banking will be able fix the economy's ongoing problems. Many blame the Fed for its monetary and assets expansion as well as the massive stimulus bill that was sent by Joe Biden, the former U.S. President.

Biden blames Russia's Vladimir Putin and Covid-19 for the economy's poor state. I know families are still struggling to pay higher gas prices. "I grew up in a household where gas prices went up and we felt it," Biden stated on Twitter April 20. The president said, "Let's not hide the fact that prices are so high right now. Vladimir Putin and COVID."

On Wednesday, Biden's statements received a lot of criticism. Fingers were pointed directly at Fed's money printer. One replied to Biden's tweet, "It has absolutely nothing to do with the Federal reserve’s'money printer go brarrrrr for Wall Street'." Joe, not all of us have dementia. Some of us can still see that you and your administration contain sh **,"," the person said. Biden was also replied to by , who wrote.

It was actually POTUS who did it because YOUR Federal Reserve printed too much money during Covid. Do not make Putin the scapegoat of your economic mismanagement.


 

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