Ark Invest CEO Catherine Wood says rate hikes shocked the world but are also pushing the economy toward risking a “deflationary bust.”
Ark Invest CEO Warns Rate Hikes Could Fuel a 'Deflationary Bust' in Open Letter to the Fed
Following the United Nations Conference on Trade and Development report that the U.S. Federal Reserve should stop raising rates, Ark Invest CEO Catherine Wood has published an open letter to the U.S. central bank asking the institution to stop raising interest rates. Wood says that the “unprecedented 13-fold increase in interest rates” has not only shocked the world but it’s also pushing the economy toward risking a “deflationary bust.
Ark Invest’s Catherine Wood Says Fed’s Last 75bps Rate Hike Was ‘Surprising,’ Letter Says 13 to 16-Fold Increase in Benchmark Bank Rates Is Riskywhich notes that the central bank’s aggressive benchmark bank rate hikes have been risky. Wood’s letter says the “Fed’s last decision to increase the Fed funds rate by 75 basis points was surprising.”
Wood’s letter says that the Fed’s concept of reducing upstream price deflation is “likely to turn into downstream deflation.” Furthermore, the Ark Invest CEO says that the Fed’s decisions are based on two “lagging indicators,” which include the inflation rate and employment metrics.published by the United Nations Conference on Trade and Development which also wants the Fed to stop hiking rates. UNCTAD estimates with each Fed rate hike, the economic output of wealthy countries declines by 0.
Both Wood’s and UNCTAD’s complaints are also akin to the criticism the Federal Reserve has received from U.S. Senator Elizabeth Warren . Warren
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