Fed May Need to Hike to 6.5% to Cool Prices, Study Says
- Wall Street economists, academics write paper for conference
- Taming inflation without ‘mild recession’ seen as doubtful
The Marriner S. Eccles Federal Reserve building in Washington, DC.
Photographer: Samuel Corum/BloombergThis article is for subscribers only.
Federal Reserve officials may need to raise interest rates as high as 6.5% to defeat inflation, according to new research that was sharply critical of the central bank’s initially slow response to rising prices.
In a paper presented Friday at a conference in New York, a quintet of Wall Street economists and academics argue that policymakers still have an overly-optimistic outlook and they will need to inflict some economic pain to get prices under control.