English
Français
Deutsch
Italiano
Português
Русский
Español
简体中文
हिन्दी
日本語
Former Federal Reserve governor Lawrence Lindsey said Wednesday that the Fed will keep raising interest rates until they reach the 6% level sometime in 2024.
“Something like a six-handle is what it has to be,” given the slow progress on inflation, Lindsey said, in an interview on CNBC.
“Core inflation is moderating only if you put a microscope on it,” Lindsey said. “The Fed will have to move.”
The Fed’s target interest rate is now in a range of 5%-5.25%. Fed Chairman Jerome Powell on Wednesday said that two more 25 basis point hikes is a “good guess” for the rest of the year.
Read: Powell tells Congress to expect higher rates
Lindsey, who was a Fed governor in the 1990s, and then was a top advisor to President George W. Bush, said he expects the two rate hikes and then more in 2024.
The Fed needs to keep hiking until the market feels pain, he said.
“Until the markets say ‘ouch,’ the Fed has not likely done it’s job,” Lindsey said.
For now, market participants have their heads in the sand and haven’t “internalized” the need to raise rates.
“They don’t want to internalize. They are being a 15-year old right now. If you want 15-year olds to behave, you know what you have to do,” Lindsey said. He now is president of The Lindsey Group, an economic advisory firm.
The Dow Jones Industrial Average
DJIA,
was holding on to slight gains after Powell’s testimony. The yield on the 10-year Treasury note
TMUBMUSD10Y,
was little changed at 3.73%.
Read the full article here