Harvard Prof., Fmr. IMF Economist Rogoff: ‘There Will Probably Be More Accidents’ as Fed Raises Rates to Fight ‘Deeply Embedded’ Inflation

On Tuesday’s broadcast of CNN International’s “One World,” Harvard University Economics Professor and former International Monetary Fund Chief Economist Ken Rogoff argued that “inflation’s deeply embedded in the rest of the economy.” And the Federal Reserve will have to keep raising interest rates, “and there will probably be more accidents. But they don’t want to end up in a situation with permanently ingrained higher inflation.”

Rogoff stated, “I don’t think the news has been that good with inflation. The headline number has been coming down because food prices and gas prices couldn’t go up forever, used car prices have come down. But inflation’s deeply embedded in the rest of the economy. The thing they call core inflation — which excludes these more volatile things — that is still really high. It went way up in January. It came down a little bit in February, but it’s way too high. It’s going to be very hard for the Federal Reserve not to raise rates at least a quarter point. I think there has been talk — which I never really agreed with — that they should go faster again. Actually, Chair Powell said that was a possibility. I think that’s off the table. But they have to keep pulling. Inflation is just way too high to stop. So, I think they’re going to have to keep moving ahead, slower, steadier, which I thought they should have done anyway, and there will probably be more accidents. But they don’t want to end up in a situation with permanently ingrained higher inflation.”

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