The US Federal Reserve is still playing with fire on interest rates
A huge stimulus added to the longest period of negative interest rates in modern times could be the riskiest experiment in the Fed’s history. The exit will rock the markets.
The US Federal Reserve has turned on a dime, an uncharacteristic about-face for an institution long noted for slow and deliberate shifts in monetary policy.
That problem, of course, is inflation. Like the Fed I worked at in the early 1970s under Arthur Burns, today’s policymakers once again misdiagnosed the initial outbreak.
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Stephen S. Roach is a faculty member at Yale University and former chairman of Morgan Stanley Asia.
