4 min read.Updated: 22 Sep 2022, 09:36 PM ISTRishi Joshi
Steep inflation in the US is partly due to Fed’s expansionary policies during the pandemic. A course correction will be a slow process.
President Biden may believe the pandemic is over, but the US economy continues to battle the after-effects of covid. The Federal Reserve is doughtily firefighting inflation, but an overheated US economy is remarkably resilient, with prices remaining elevated despite five rounds of rate hikes already in 2022. Job market and wages remain relatively buoyant, and more rate hikes appear imminent. Inflation in the US is, in part, a result of the Fed’s expansionary policies during the pandemic. The Ukraine war has only aggravated supply chain bottlenecks. For India, a global slowdown – or even a recession – may help in keeping inflation in check, but an erratic monsoon poses fresh challenges.
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