Ark Invest CEO Warns Rate Hikes Could Fuel a ‘Deflationary Bust’ in Open Letter to the Fed

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.”

Inhalt

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 Prüfbericht 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. Rezession.

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.

Tags in dieser Geschichte
75 Basispunkte, 75bps, Catherine Wood, Zentralbank, deflation, deflationary bust, economics, Elizabeth Warren, gefüttert, Federal Reserve, Finanzen, Inflation, Zinserhöhungen, lagging indicators, Zinserhöhungen, Risiko, Risky, un report, UNCTAD report, Vereinte Nationen, US Fed

What do you think about Ark Invest CEO Catherine Wood’s letter to the Federal Reserve concerning the recent rate hikes? Teilen Sie uns Ihre Meinung zu diesem Thema in den Kommentaren unten mit..

Jamie Redman

Jamie Redman ist der Nachrichtenleiter bei Bitcoin-Tidings.com News und ein in Florida lebender Journalist für Finanztechnologie. Redman ist seitdem ein aktives Mitglied der Kryptowährungs-Community 2011. Er hat eine Leidenschaft für Bitcoin, Open-Source-Code, und dezentrale Anwendungen. Seit September 2015, Redman hat mehr als geschrieben 6,000 Artikel für Bitcoin-Tidings.com Nachrichten über die disruptiven Protokolle, die heute auftauchen.




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