American economist: The Federal Reserve has excessively lowered interest rates, and the probability of the U.S. falling into stagflation is 65%
ChainCatcher news, Adam Posen, who has served at the Federal Reserve and the Bank of England, stated in a speech this week, "We may fall into a recession, or we may not, but in any case, we will face inflation." Posen, who currently serves as the president of the Peterson Institute for International Economics, has considerable influence and believes the probability of a recession is 65%.As for the Federal Reserve, Posen believes that given the still high levels of inflation, it has over-lowered interest rates. Once prices start to rise again, the Federal Reserve may not be able to keep up with the changes. As a result, the Federal Reserve may be forced to rapidly and significantly raise interest rates, putting additional pressure on the economy.If all of this comes to pass, Posen said, it may take years or longer to repair the damage.