Fed can’t tame inflation without ‘significantly’ more hikes that will cause a recession, paper says

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The Federal Reserve building is seen before the Federal Reserve board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, January 26, 2022.Joshua Roberts | ReutersThe Federal Reserve is unlikely to be able to bring down inflation without having to raise interest rates considerably higher, causing a recession, according to a research paper released Friday.Former Fed Governor Frederic Mishkin is among the authors of the white paper that examines the history of central bank efforts to create disinflation.Despite the sentiments of many current Fed officials that they can manage a “soft landing” while tackling high prices, the paper says that is unlikely to be the case.”We find no instance in which a central-[bank]induced disinflation occurred without a recession,” said the paper, co-authored by economists Stephen Cecchetti, Michael Feroli, Peter Hooper and Ker …

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