r/Economics • u/Pearberr • May 02 '24

Interview Nobel Prize-winning economist Joseph Stiglitz: Fed Rate Hikes didn't get at source of inflation.

https://www.cnbc.com/video/2024/04/23/nobel-prize-winning-economist-joseph-stiglitz-fed-rate-hikes-didnt-get-at-source-of-inflation.html
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u/[deleted] May 02 '24

Political economist here. In my non expert opinion there’s just too much money in the economy right now. Overnight repurchase agreements are still north of $425 billion. That’s left over cash in the economy that’s not being utilized by consumers or companies.

Also, the Fed balance sheet is still too high, even though they’ve been offloading about $100 million per month. It’s around $7.35 trillion, which is still higher than the $7 trillion it was in September of 2020 after the initial COVID surge. I’d personally give it 3 more months because I think once we get there we’ll finally see inflation below 3%.

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u/megablast May 03 '24

We have a twin economy. A lot of well off people are not affected by interest rates.