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'Inflation eats while you sleep': World waits for US Fed interest rate decision

25 January 2022 6:53 PM
Tags:
Interest rates
The Money Show
Inflation
Reserve bank
Bruce Whitfield
US Federal Reserve
Adrian Saville
Us fed
inflation rate
interest rate

The US Federal Reserve decision will have a global impact. Bruce Whitfield interviews Genera Capital's Prof. Adrian Saville.

The world is nervously watching the US Federal Reserve ahead of its decision on interest rates as inflation continues its upward trend.

The policy-making body started a two-day meeting on Tuesday.

Goldman Sachs expects the US Fed to enact four interest rate hikes in 2022 but thinks more are possible due to the surge in inflation, reports CNBC.


Related stories:

Reserve Bank has to respond with interest rate hikes as inflation jumps to 5.9%

Tough times ahead: expect interest rate hikes of 100bp in 2022 - economist


Bruce Whitfield interviews Professor Adrian Saville, Investment Specialist at Genera Capital.

It's a very big date-week for the US... the big Fed announcement... GDP numbers... inflation numbers at the end of the week...

Prof. Adrian Saville, Investment Specialist - Genera Capital

The anxiety is that inflation, while not quite in runaway territory, has surprised... You have to go back 40 years to find similar types of inflation prints in the US...

Prof. Adrian Saville, Investment Specialist - Genera Capital

One of the surest ways to erode prosperity is inflation - it eats while you sleep.

Prof. Adrian Saville, Investment Specialist - Genera Capital

Having this 6/7% price growth in the US is a very concerning number... The big word of 2021 was 'transitory'... but it doesn't look like it's going to go away quickly because the things that catalyzed it are fairly permanent, so this inflation looks like it is going to stick around for some time even if it moderates.

Prof. Adrian Saville, Investment Specialist - Genera Capital

Prof. Saville notes that we shouldn't be misled by any moderation - even if the inflation rate were to fall from 7% to 2%, it doesn't mean that prices will fall.

What we have behind us now, is prices that are 7% higher than a year ago.

Prof. Adrian Saville, Investment Specialist - Genera Capital

What the Fed needs to do is to temper inflation without hurting growth too much... It's like juggling with hand grenades with the pins pulled out!

Bruce Whitfield, The Money Show host

The consensus is that South African Reserve Bank is set to raise interest rates on Thursday.

Listen to the discussion on The Money Show:


This article first appeared on CapeTalk : 'Inflation eats while you sleep': World waits for US Fed interest rate decision




25 January 2022 6:53 PM
Tags:
Interest rates
The Money Show
Inflation
Reserve bank
Bruce Whitfield
US Federal Reserve
Adrian Saville
Us fed
inflation rate
interest rate

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