The FED should reduce interest rates by 50 basis points

07.09.2024. / 16:49

NEW YORK – Economist Joseph Stiglitz, winner of the Nobel Prize in 2001, believes that the US Federal Reserve (FED) raised interest rates too quickly and too much and that they should reduce them by 50 basis points at the September meeting.

In his opinion, the US central bank made a mistake by keeping the benchmark borrowing rate close to zero for a long period from 2008, and then raising interest rates in the US too sharply.

According to Stiglic, high interest rates “put the American economy at risk for very little benefit” and probably only further fueled inflation, which is largely a consequence of the situation on the housing market, CNN reports.

Stiglic drew attention to the lack of housing in the United States, which raises inflation, and noted that high interest rates only make housing construction even more difficult. Tanjug