Following the United Nations Conference on Trade and Development (UNCTAD) report that the U.S. Federal Reserve should stop raising rates, Ark Invest CEO Catherine Wood has published an open letter to the U.S. central bank asking the institution to stop raising interest rates. Wood says that the “unprecedented 13-fold increase in interest rates” has not only shocked the world but it’s also pushing the economy toward risking a “deflationary bust.”
Ark Invest’s Catherine Wood Says Fed’s Last 75bps Rate Hike Was ‘Surprising,’ Letter Says 13 to 16-Fold Increase in Benchmark Bank Rates Is Risky
Ark Invest CEO Catherine Wood has published an open letter to the Federal Reserve which notes that the central bank’s aggressive benchmark bank rate hikes have been risky. Wood’s letter says the “Fed’s last decision to increase the Fed funds rate by 75 basis points was surprising.”
Wood’s letter says that the Fed’s concept of reducing upstream price deflation is “likely to turn into downstream deflation.” Furthermore, the Ark Invest CEO says that the Fed’s decisions are based on two “lagging indicators,” which include the inflation rate and employment metrics.
The letter from the CEO follows the recent report published by the United Nations Conference on Trade and Development (UNCTAD) which also wants the Fed to stop hiking rates. UNCTAD estimates with each Fed rate hike, the economic output of wealthy countries declines by 0.5% and for poorer countries, it declines by 0.8% for a duration of three years.
Both Wood’s and UNCTAD’s complaints are also akin to the criticism the Federal Reserve has received from U.S. Senator Elizabeth Warren (D-Mass). Warren complained about the Fed raising the federal funds rate and she further discussed the problem with CNN. Warren said at the time she was “very worried” that the Fed’s rate hikes will fuel a U.S. recession.
Ark Invest’s Wood believes that the rate hikes could cause a deflationary spiral. “Could it be that the unprecedented 13-fold increase in interest rates during the last six months––likely 16-fold come November 2––has shocked not just the US but the world and raised the risks of a deflationary bust?” Wood asks in the open letter to the Fed published on Monday.
What do you think about Ark Invest CEO Catherine Wood’s letter to the Federal Reserve concerning the recent rate hikes? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin-Tidings.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.