Expert says U.S. Federal Reserve will not be able to overcome inflation by raising rates,

The US Federal Reserve will fight monetary inflation by reducing the asset buyback program and raising the key rate, but the problems of disrupting production and logistics processes will remain, Dmitry Alexandrov, chief analyst at Univer Capital, told RIA Novosti.

Expert says U.S. Federal Reserve will not be able to overcome inflation by raising rates,

“The US Federal Reserve may start reducing the buyback program at a higher pace, raising the key rate may happen as early as March, and this is an inevitable move against the backdrop of record inflation since the 80s. But there is a subtlety: inflation began to accelerate not only due to a sharp increase of the money supply in circulation, but also due to a serious disruption in production and logistics processes caused by lockdowns and trade wars,” Alexandrov says.

According to the US Department of Labor, annual inflation in the country accelerated to 7% last year from 6.8% in November, while consumer prices rose by 0.5% in December alone. Thus, inflation in the US is even closer to its maximum value in almost 40 years. According to the results of June 1982, it was 7.2%.