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Your Evening Briefing: Powell’s Inflation Fight Has Global Implications

Get caught up.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting in 2020 in Washington.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting in 2020 in Washington.

Photographer: Samuel Corum/Getty Images North America

For Americans who expected inflation to peak this summer, a consumer price report for August seems to have dashed those hopes. But for the rest of the world, what comes next could be really depressing. That’s because the US Federal Reserve and Chair Jerome Powell will now feel justified in taking even bigger steps with interest rates to tamp down prices. The cure may be worse than the sickness, Marcus Ashworth writes in Bloomberg Opinion. If the Fed raises rates aggressively, the effects will be felt outside its national purview, he warns. Parts of the global economy will break, the worldwide downturn will blow back on the US, and then everyone will find themselves running headlong into the dark realm of unintended consequences. 

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.