An analyst from Moody’s believes that it is time for the Federal Reserve to pause the fight against inflation1 min read
According to leading economist Mark Zandi from Moody’s, the Fed should take a pause in raising interest rates in May, reports Business Insider. Zandi cited weaker job growth in the US, decreasing inflation, and bank disruptions as reasons for the pause. He believes that the Fed’s efforts could slow the already sluggish economy too much.
Zandi said on Monday, “I would pause rates because I do think that job growth is slowing.” He believes that the Fed should take a break with rate hikes in May before the increases actually have an impact on the US economy and drag it down.
Official data released on Friday showed that in March, the US economy created fewer jobs than expected – 236,000. If this is combined with slowing inflation and an unfavorable banking situation, it would be the recipe for a pause in raising interest rates.
Over the last year, the Fed has raised rates from almost zero to around 5% to try to rein in rising inflation. Last summer, inflation in the US hit a 40-year high due to extended supply chain disruptions and falling global commodity prices.
The US central bank is scheduled to release its decision on May 3 following its meeting.