But the danger of the recession is more serious even because inflation threatens to tie hands to the governing body of the monetary policy in the United States.UU. According to the minutes, the members of the Committee agree that keeping inflation expectations was essential and this generates a dilemma. What you will do here in more Fed? To reserve Federal of Dallas, Robert Mcteer, President I do not think that the Fed can continue lowering their rates of interest my interpretation, based on what you can guess, is that the Fed is going to do what you would not want to continue with the cut of rates. Definitely go for an all or nothing, hoping that the economy will recover as soon as possible to then turn 180 degrees in the rates policy and return to scroll through the ascending path but this time, at a higher rate than in the Greenspan era. For the members of the Fed, already there is no room for a gradual rates policy, because they feel that they are going in the opposite direction, moved by the urgency.
Meanwhile, William Poole, President of the federal Reserve Bank of St. Louis, who will leave his post next March (will not be at the next meeting of the Fed’s 18), does not want to be seen as one of the culprits of the inflationary problem. In a speech in Kirksville, Missouri, Poole said that while the Fed should try to encourage growth, it should not do so at the cost of allowing inflation to get out of control and cause havoc. Just how much more sensitive is the situation for the Fed, Poole made a statement which shows more in favour of an increase of rates, really is a statement that does not help anything. I understand that the Fed faces a time bomb who thinks disable once manages to give the necessary boost to the American economy. This worries me, because I don’t have many expectations that economic recovery will occur in the short term and therefore perceive that we are going to hear more frequently the word: stagflation.