Lutnick: «High inflation, the Fed will maintain charges excessive for a very long time to come back» | EUROtoday

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“We cannot ignore the importance of balanced monetary policies to ensure sustainable growth.” Word of Howard LutnickCEO of Cantor Fitzgerald, interviewed by Bloomberg Television at World Economic Forum of Davos, Switzerland. Lutnick, probably the most authoritative voices within the US monetary system, provided some meals for thought on the way forward for the worldwide economic system, putting specific emphasis on the affect of economic insurance policies Federal Reserve .

«Inflation hasn’t disappeared but»

His views on rates of interest and inflation tackle specific relevance particularly in gentle of his function as chief in probably the most influential American monetary establishments. “The Federal Reserve has a difficult task, but it is essential to find a balance that does not slow down economic growth, while continuing to keep inflation at bay.” On the latter, the state of affairs stays unsure: “The economy is holding up. Inflation has not disappeared yet. Young people think that zero interest rates are the norm, but for someone my age, 62, it is clear that this is an artificial situation.”

«We should count on larger charges for longer»

A tense scenario, subsequently, however not apocalyptic: “Stability at a rate of 5% seems normal to me. We have a $34 trillion deficit; 2% would not be realistic, but 5% would be. I think the world can handle it. Inflation is still too high, but it is falling. It is not yet a thing of the past. We should expect higher rates for longer. It’s more a question of adapting to current circumstances,” she says, highlighting the fragile steadiness between controlling inflation and supporting financial development.

Keyword: adaptability

Regarding the worldwide affect of the Federal Reserve’s choices, Lutnick underlined: “The world’s economies are interconnected. A decision made in Washington can have repercussions in Tokyo, London or Frankfurt.” From his vantage point in Davos, Lutnick also provided an overview of future economic trends, underlining the importance of a proactive and adaptive approach in an increasingly changing context. ”Looking forward, we should be able to react shortly to market modifications. Adaptability would be the key to financial prosperity”.