The Chicago Fed announced that the US will achieve the expected result in inflation and that there will be an inflow of money into risky assets such as cryptocurrencies.
Economists at the Federal Reserve Bank of Chicago (Chicago Fed) stated that the US will be successful in its economic policy and there will be no need for further tightening. Economists pointed out that with the expected fall in inflation, there may be inflows to investment instruments such as cryptocurrencies.
“There will be no need for further tightening”
Economists at the Federal Reserve Bank of Chicago conducted a new study. This research suggested that the US Federal Reserve would lower inflation without causing a recession in its interest rate policy. Pointing to an inflation rate of 2 percent, economists stated that more money could be injected into risky asset products such as crypto currencies.
Economists Stefania D’Amico and Thomas King said that the 500 basis point increase in interest rates caused problems in the economy. Economists who cite recession concerns predict that further tightening will not be needed and inflation will decline.
“Although the majority of the effects on output and inflation have already occurred, we estimate that the policy tightening currently implemented will create more restraints in the coming quarters and put downward pressure on real gross income by about 3 percentage points,” the Chicago Fed research report said. 2.5 points at the level of domestic product (GDP) and Consumer Price Index (CPI).”
As a result of falling inflation and a resilient economy, it is on the agenda that risks will begin to be taken in global financial markets. Chicago Fed economists think that assets such as cryptocurrencies will become more prominent.
