Fed rate hikes in 2022 won't help inflation: Fmr. White House economist
Inflation hit a 30-year high surpassing 6% in October
Former Acting Chairman of the Council of Economic Advisers, Tyler Goodspeed, predicted two potential rate hikes in 2022 may not be enough to combat rising consumer prices.
Tyler Goodspeed, the former acting chairman of the Council of Economic Advisers, predicted inflation will likely continue into 2022 despite the Federal Reserve potentially hiking interest rates twice next year. Goodspeed joined "Mornings with Maria" on Monday to discuss high consumer prices, arguing even two rate cuts may not "cut it" as the economy continues to grapple with supply chain and labor force shortages.
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TYLER GOODSPEED: Markets certainly think it will. You look at inflation break even since Chair Powell started giving indications of a faster taper and... the possibility of rate hikes in 2022, so markets certainly anticipate that it's going to have a cooling effect. I'm not so convinced because as we noted, inflation expectations have risen and you have all these supply chain bottlenecks, you have increased... demand stimulus coming in 2022 with the reconciliation bill. We still have a labor force participation problem. We are still $1.8 trillion cumulatively short on business investment. So I think the bigger picture macro situation still points to a lot of inflationary pressure, and I don't know that the two rate hikes are going to are going to cut it.
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Former Acting Chairman of the Council of Economic Advisers, Tyler Goodspeed, joined 'Mornings with Maria' to discuss global inflation fears.