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Economist explains how inflation problem becomes a 'growth problem'
How inflation problem becomes a ‘growth problem’
Kleinheinz Fellow at the Hoover Institution at Stanford University, Tyler Goodspeed, weighs in on the latest inflation data, arguing that the probability of getting another 75-basis point rate hike shot up another 50%.
Tyler Goodspeed, a Kleinheinz Fellow at the Hoover Institution at Stanford University, explained on Wednesday how the inflation problem becomes a "growth problem."
He argued on "Mornings with Maria" that, so far, "the only thing really keeping the show on the road is the American consumer."
The economist, who served as Acting Chairman and Vice Chairman of the Council of Economic Advisers from 2020 to 2021, noted that business investment, residential investment as well as inventories, and exports, are all "heading down" and said, once the consumer also starts to limit spending, "I think we’re in series trouble."
Goodspeed also argued that the probability of another 75-basis point rate hike has shot up another 50% following the release of the latest inflation data.
INFLATION SURGES 9.1% IN JUNE, ACCELERATING MORE THAN EXPECTED TO NEW 40-YEAR HIGH
Last month, central bank policymakers approved a 75 basis-point rate hike for the first time since 1994 as they race to catch up with runaway inflation, which, according to data released on Wednesday, now sits at new 40-year highs.
Another hike of that magnitude could be on the table this month amid signs of stubbornly high inflation, Chairman Jerome Powell told reporters after the meeting, prompting investors to reassess the economic outlook.