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Opinion
Bill Dudley

If Stocks Don’t Fall, the Fed Needs to Force Them

Tightening financial conditions will be key to getting inflation under control.

Bloomberg business news
Bill Dudley Says Fed Might Need to Force Stocks to Fall
Corrected

It’s hard to know how much the U.S. Federal Reserve will need to do to get inflation under control. But one thing is certain: To be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.

Market participants’ heads are already spinning from the rapid change in the outlook for the Fed’s interest-rate policy. As recently as a year ago, they expected no rate increases in 2022. Now, they foresee the federal funds rate reaching about 2.5% by the end of this year and peaking at more than 3% in 2023.