The Federal Reserve has been aggressively hiking the interest rates in recent months to tame 40-year high inflation. But despite the record of success that high-interest rates had in the fight against inflation, not everyone is pleased with the Fed’s decision. Some experts even said that this plan will “kill the economy.”
But John Stoltzfus, chief asset management strategist at brokerage and investment bank Oppenheimer & Co. Inc., doesn’t share this sentiment. The economy veteran thinks the Fed’s plan is a bit different below the surface.
“The Federal Reserve isn’t trying to kill the economy, it’s just trying to end free money,” said veteran Stoltzfus via Yahoo Finance.
According to Stoltzfus, if the Fed achieves its goal, it will actually be good for the economy.
“Free money is bad in our view in that it encourages all kinds of speculation, it inflates asset classes.. and it creates instability in the economy,” he added.
During the June meeting, the Federal Reserve hiked the interest rates by 0.75 percentage points. This was the biggest single increase since 1994 and brought the Fed’s benchmark funds rate to a range of 1.5 percent to 1.75 percent. However, this will probably not be the end of it, as another 0.75 percentage point hike is expected later this month.