Federal Reserve Risks Next Boom-Bust Cycle as Warsh Weighs Rate Hikes
Updated
Updated · Bloomberg · Jun 17
Federal Reserve Risks Next Boom-Bust Cycle as Warsh Weighs Rate Hikes
3 articles · Updated · Bloomberg · Jun 17
Summary
Kevin Warsh’s arrival at the Federal Reserve sharpens a policy dilemma: a more rules-based approach would point toward rate hikes, even as analysis warns the Fed is helping fuel another boom-bust cycle.
Bond markets are already signaling higher rates, and recent data back that view — in places where unemployment fell over the past six months, inflation also increased.
That puts Warsh between market expectations and President Donald Trump’s push for rate cuts, complicating any effort to tighten policy quickly.
The broader argument is that accepting higher rates now could curb excesses earlier and reduce the risk of a deeper bust later.