![]() One important factor, especially in the U.S., is a lack of competition that allows giant corporations to set high prices without any viable pushback from the market. So what's causing inflation and what can we do about it? Well, since it's a supply-side issue, it has to do with suppliers. That's more than likely because there isn't one. Now the Fed wants to increase unemployment – and no one, not even economists trained in this field, can find a satisfactory explanation. What's not clear to us is why." We were led to believe that a lack of workers was stringing up critical supply chains and everyday services. Not only is this a slap to the face to an estimated 500,000 who cannot work due to a disability from COVID-19 infection, but it's contradicting the Fed's own policy now.Īs Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a report: "The Fed clearly wants the labor market to weaken quite sharply. ![]() ![]() Likewise, it was believed that an unwillingness to work by some Americans could be spurring inflation. There is no out-of-control consumer spending demand is simply attuning to where it was at pre-pandemic levels. Any wage increases workers scored during the pandemic have actually translated into wage decreases in real terms. If the fed wishes to reduce the federal funds rate it could driver#The inflation stimulus Americans received during the pandemic is gone and not the main driver of the highest inflation in four decades. The Fed and other central banks have been acting on the false idea that pent-up demand from the ongoing COVID-19 pandemic or modest wage increases in recent years was to blame for inflation.īut this is wrong. The agency highlights that the inflation we're seeing is supply-driven and not demand-driven. The UNCTAD notes that the current policy by the Fed and other central banks in rich countries are trying to solve supply-side issues by cooling demand – but that this makes no sense and is ineffective. The agency argued this would hit poor countries especially hard, with economic output in these countries knocked out by a whopping $360 billion over three years. Federal Reserve, are risking a global economic recession and prolonged stagnation if they continue to raise interest rates. The United Nations Conference on Trade and Development (UNCTAD) said in its annual report this week that central banks, particularly the U.S. ![]() The article reflects the author's views and not necessarily those of CGTN. Editor's note: Bradley Blankenship is a Prague-based American journalist, political analyst and freelance reporter. ![]()
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