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MNI INTERVIEW:Fed To Hike Into Weaker Growth If Inflation High

(MNI) Washington

Ex-Governor Stein says risk of inflation expectations surge means Fed can no longer "look through" energy price spikes.

The Federal Reserve will likely keep raising interest rates even if the economy slows considerably as long as headline inflation remains elevated because the risk of unanchored expectations means it can no longer look through energy price shocks, ex-Fed governor Jeremy Stein told MNI.

Fed officials have made clear that fighting 40-year high inflation is their top priority regardless of a possible slowing in the economy, which policymakers still hope can avoid a recession. .

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The Federal Reserve will likely keep raising interest rates even if the economy slows considerably as long as headline inflation remains elevated because the risk of unanchored expectations means it can no longer look through energy price shocks, ex-Fed governor Jeremy Stein told MNI.

Fed officials have made clear that fighting 40-year high inflation is their top priority regardless of a possible slowing in the economy, which policymakers still hope can avoid a recession. .

Keep reading...Show less