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Rogoff Sees Fed Hiking Rates Up to 5% as Things Are ‘Out of Control’

  • Harvard professor, ex-IMF chief economist speaks on Bloomberg
  • Sees risks of perfect storm of U.S., EU, China recessions
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Harvard University Economics Professor Ken Rogoff says the Fed will need to raise its benchmark interest rate up to 5%.”Source: Bloomberg
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The Federal Reserve will have to raise interest rates to as much as 5% to ease the hottest inflation in four decades just as the world faces a “perfect storm” of potential recessions in the U.S., European Union and China, former International Monetary Fund chief economist Kenneth Rogoff said.

The idea that increasing rates to just 2% or 3% will slow price growth “is really unlikely -- I think they’re going to have to raise interest rates to 4% or 5% to bring inflation down to 2.5% or 3%,” the Harvard University professor said in an interview on Bloomberg Television on Tuesday with Lisa Abramowicz, Jonathan Ferro and Tom Keene. “There’s just a lot of uncertainty. I’m not going to say I know exactly what needs to be done. But it’s clear that things are way out of control.”