Source: CNBC —
Federal Reserve officials have spent the last week indicating rate hikes will continue in order to bring down rising prices — but this risks intensifying inflationary pressures, according to a Nobel Prize-winning economist.
“The real worry in my mind is, will they increase interest rates too high, too fast, too far?” Joseph Stiglitz told CNBC’s Steve Sedgwick Friday at the Ambrosetti Forum in Italy.
The Columbia University professor, author of “The Price of Inequality” and “Globalization and Its Discontents,” said that while there did need to be an adjustment from the zero or near-zero interest rate policy that has prevailed since 2008, there were three reasons an aggressive Fed course could stoke inflation.
The first is that the overwhelming source of inflation, by Stiglitz’s analysis, is supply-side disruptions leading to higher prices in oil and food, even causing a shortage of baby formula.
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