Paul Volcker, the man credited for ending the period of high inflation of the 1970s and early 1980s (more of that discussed here previously), is reported to have said that the Federal Reserve of the United States will probably be forced to tighten monetary policy soon (via Nasdaq).
He said “With the looming budget deficits we have and zero interest rates, you can’t have that forever without causing inflationary problems.”
Of course, inflation has been rising lately literally around the world, including the United States.
Source: Bureau of Labour Statistics
Yet we are also seeing signs of slowdown of the global economy. It would be interesting, then, to see if inflation now is, as Ben Bernanke said, just transitory.
This article originally appeared here: Paul Volcker: The Fed Will Soon Have To Tighten Monetary Policy
Also sprach Analyst – World & China Economy, Global Finance, Real Estate
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