[BrianC]

The Federal Reserve and other central banks risk pushing the global economy into recession followed by prolonged stagnation if they keep raising interest rates, a United Nations agency said Monday. From a report:
The warning comes amid growing unease about the haste with which the Fed and its counterparts are raising borrowing costs to contain surging inflation. India's central bank Friday said that the global economy was facing a third major shock after the Covid-19 pandemic and Russia's invasion of Ukraine, in the form of aggressive rate increases by central banks in rich countries. In its annual report on the global economic outlook, the United Nations Conference on Trade and Development said the Fed risks causing significant harm to developing countries if it persists with rapid rate rises. The agency estimated that a percentage point rise in the Fed's key interest rate lowers economic output in other rich countries by 0.5%, and economic output in poor countries by 0.8% over the subsequent three years. UNCTAD estimated that the Fed's rate increases so far this year would reduce poor countries' economic output by $360 billion over three years, and further policy tightening would do additional harm. "There's still time to step back from the edge of recession," UNCTAD Secretary-General Rebeca Grynspan said. "We have the tools to calm inflation and support all vulnerable groups. But the current course of action is hurting the most vulnerable, especially in developing countries and risks tipping the world into a global recession."https://news.slashdot.org/story/22/10/03/1834240/un-says-fed-other-central-banks-risk-pushing-global-economy-into-recession-requests-halt-on-interest-rate-increases

[Plantagenet]

I saw this statement from the UN.

It seemed incredibly naive and even downright stupid to me.

Doesn't the UN understand that the only reason the FED and other central banks are raising interest rates is to try to reduce inflation, because runway inflation is a terrible economic problem?

AND, far from being concerned about causing a recession, the FED and other central banks are clearly TRYING to cause a recession, because shrinking the economy and putting millions of people out of work is the only proven way to stop inflation. And as far as I can see, the FED and other central banks are doing a damn fine job of causing a recession. In the US GDP has already shrank for two successive quarters, the stock market has collapsed, and I expect massive job layoffs to start any day now.......


The FED is TRYING to cause a recession in order to stop inflation....isn't that obvious?

Cheers!