Former Central Bank economist: The Federal Reserve's excessive interest rate cuts pose a 65% risk of stagflation in the U.S.

Gate news bot message, former Federal Reserve and Bank of England economist Adam Posen pointed out in a recent speech: “We may fall into a recession, or we may not, but in any case, we will face inflation.” Posen, who is currently the director of the Peterson Institute for International Economics, predicts that the likelihood of the U.S. economy entering a recession is as high as 65%.

Powell stated that, given the current inflation rate remains high, the Federal Reserve’s interest rate cuts have been excessive. He warned that once prices start to rise again, the Federal Reserve may find it difficult to respond in time and may be forced to rapidly and significantly raise interest rates, which would put more pressure on the economy.

Bosen further pointed out that if the above situation comes true, the recovery period for economic damage may take several years or longer.