The crypto-currency market has seen a major selloff due to the Federal Reserve’s hawkish stance. Several key central bank officials gave speeches, speaking on a wide range of issues. However, the most prominent theme was the Fed’s response to the soaring level of inflation.
Susan Collins of the Boston Fed, Loretta Mester of the Cleveland Fed, and Raphael Bostic of Atlanta all gave key speeches. Other key officials, including Fed President Jerome Powell, are scheduled to give their views on the macroeconomic situation.
Nearly all officials are maintaining their hawkish stance on inflation. However, many market participants are extremely unhappy with their answers. Experts believe the Fed is ignoring the recession in the same way it ignored inflation in its early days.
What the Fed is saying about the recession
Fed officials continue to be adamant about their stance against inflation. Susan Collins of Boston believes the Fed will have to take more drastic action to curb stubbornly high inflation rates. She also believes that this process will result in job losses. Susan Collins also points out that a major economic or geopolitical event can lead to a recession.
Raphael Bostic’s reasoning is that price stability is the precondition for maximum long-term employment. She hopes that the accompanying downturn will be modest.
Neel Kashkari of the Minnesota Federal Reserve also takes a restrictive position. He is traditionally a figure dovish within the Fed. However, Neel Kashkari explains that the Fed will not make the mistake of cutting taxes when the economy weakens.
Atlanta’s Raphael Bostic says the central bank has a long way to go to curb inflation, and Cleveland’s Lorretta Mester agrees.
Fed gets slammed
Market participants are not happy with the Fed’s response. They think the central bank is underestimating a recession, as when it said inflation was transitory.
Jeremy Siegel, Professor of Finance at Wharton Business School, rips Fed chair Jerome Powell for his disastrous monetary policy. pic.twitter.com/ZyLNQYgM7p
– Tuli Urbach (@TuliUrbach) September 23, 2022
Wharton professor Jeremy Siegel gave a speech fiery on CNBC where he said the Fed has no idea what it’s doing.