FED fights inflation; Expects further rate hikes for disinflation to avoid recession

The Fed Reserve is not likely to have the ability to reduce inflation without significantly raising interest rates. Which can causing a recession, According to a report published on Friday.

The report asserts that this is unlikely to be the case. Despite the beliefs of many Fed officials that they can arrange a “soft landing” while addressing excessive prices.

“Taming Inflation” can cause recession, FED to attain it’s inflation aim by 2025′

“Even if inflation predictions remain consistent, our research raises doubt on the Fed’s capacity to design a gentle landing in which inflation gets back to the two percentage objective by the end of year 2025 without a light recession,” they said.

According to the researchers, the Fed should resume hiking rates in a preventive manner. As it did when the rate of unemployment dropped significantly.

In contrast to the late 1960s and early 1970s, Jefferson noted, “the Fed is tackling the outbreak in inflation immediately and strongly in order to retain that trustworthiness and the “well anchored” feature of long-term inflation predictions.“