Point of View: The Federal Reserve Has Over-Eased, with a 65% Chance of Stagflation in the United States

BlockBeats News, April 18th, Adam Posen, who has served in the Federal Reserve and the Bank of England, said in a speech this week, "We might be heading into a recession, or we might not, but either way, we will face inflation." Posen, currently serving as the President of the Peterson Institute for International Economics, has considerable influence, and he believes there is a 65% chance of a recession.

As for the Fed, Posen believes that considering the still relatively high level of inflation, it has cut interest rates too aggressively. Once prices start rising again, the Fed may not be able to keep up with the changes. As a result, the Fed may be forced to rapidly and significantly increase interest rates, putting additional pressure on the economy.

If all this were to materialize, Posen said, repairing this damage may take several years or even longer. (FXStreet)