A customer shops at a market in the Brooklyn borough of New York on May 12. US consumer prices rose 0.8 per cent in April from a month earlier, with the annual rate jumping to 4.2 per cent, the highest since September 2008. Photo: Xinhua A customer shops at a market in the Brooklyn borough of New York on May 12. US consumer prices rose 0.8 per cent in April from a month earlier, with the annual rate jumping to 4.2 per cent, the highest since September 2008. Photo: Xinhua
A customer shops at a market in the Brooklyn borough of New York on May 12. US consumer prices rose 0.8 per cent in April from a month earlier, with the annual rate jumping to 4.2 per cent, the highest since September 2008. Photo: Xinhua
Stephen Roach
Opinion

Opinion

Macroscope by Stephen Roach

How the US Fed’s reassurances on inflation fears are triggering a 1970s flashback

  • Now as then, the Fed sees recent increases in the prices of food and other essential goods as transitory, believing they will stabilise with post-pandemic normalisation
  • But the biggest parallel may be another policy blunder – as before, the Fed is keeping real interest rates depressed, which in the 1970s only fuelled inflation

A customer shops at a market in the Brooklyn borough of New York on May 12. US consumer prices rose 0.8 per cent in April from a month earlier, with the annual rate jumping to 4.2 per cent, the highest since September 2008. Photo: Xinhua A customer shops at a market in the Brooklyn borough of New York on May 12. US consumer prices rose 0.8 per cent in April from a month earlier, with the annual rate jumping to 4.2 per cent, the highest since September 2008. Photo: Xinhua
A customer shops at a market in the Brooklyn borough of New York on May 12. US consumer prices rose 0.8 per cent in April from a month earlier, with the annual rate jumping to 4.2 per cent, the highest since September 2008. Photo: Xinhua
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Stephen Roach

Stephen Roach

Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China.