Economics
Fed ‘Shock Therapy’ Not Needed to Tame Hot Economy, Krugman Says
- Nobel laureate says no signs that inflation is yet entrenched
- Fed needs to get going on rate increases, Krugman says
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Nobel laureate economist Paul Krugman said while it’s time for the Federal Reserve to start raising interest rates, there’s no crisis with regard to inflation and indicated that policy makers will be able to be measured in their tightening.
“This is clearly a very hot economy and it’s the Fed’s job to cool it off a bit,” Krugman said Friday on “Balance of Power” with David Westin on Bloomberg Television. As for what’s needed, he said, “Definitely not shock therapy.”