Harvard economist on ‘eye-popping’ inflation amid Federal Reserve uncertainty
Biden to pick Federal Reserve chairman amid inflation, supply chain backlog
Economist on ‘eye-popping’ inflation amid Fed uncertainty
Former IMF chief economist Kenneth Rogoff argues U.S. is on 'knife edge' with inflation.
Harvard economist Kenneth Rogoff joined "Mornings with Maria" to discuss "eye-popping" inflation wreaking havoc across the country ahead of the holiday season and the pressure on the Federal Reserve to get the U.S. back on track.
"I think we’re on a knife-edge" of where inflation is going, Rogoff said.
The former IMF chief economist noted that there’s a "50-50 chance or a little less" that the Fed is right and inflation is "temporary" if they follow through on their method for curbing the surge.
Growing pains from the rise in costs has sparked uneasiness among Americans.
Following a government report that highlighted the 6.2% spike in prices for consumers in October, the U.S. is currently seeing its largest prices flare up in 30 years.
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"I think it’s pretty clear that the first stimulus right after Biden took office and maybe the one at the end of the year in 2020 were a little too late in the game," Rogoff told the FOX Business’ Maria Bartiromo.
"They have added to the inflation, along with supply chain and everything else," he explained.
FILE - ,Cargo containers sit stacked at the Port of Los Angeles, Wednesday Oct. 20, 2021 in San Pedro, Calif. California Gov. (AP Photo/Ringo H.W. Chiu / AP Newsroom)
As the country tries to handle the surging costs of consumer goods and supply chain backlogs, economists and Biden’s toughest critics are warning of another potential economic hurdle -- the president’s Build Back Better Agenda.
"This further bill, it’s kind of hard to read. It’s a remake of the government. It’s going to have an effect on productivity investment," Rogoff said.
The economist told the FOX Business host that the plan may not be as severe as inflation, but could be an indication of "the credibility of the government," while raising the question about whether the Fed will raise rates when it needs to.
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"I have a feeling at the moment that the Biden administration is on its back heels, and that’s not a good situation to be in when you’re having to fight inflation, when you’ve got to be willing to take a tough hit if needed," he said.
Rogoff pointed out that the Fed’s "soft" policy comes as Biden is poised to choose the next Fed Chair and that its current Chairman Jerome Powell could take himself "out of the running" by raising interest rates in advance.
Biden's Build Back Better plan adds to deficit, CBO score shows
Former IMF chief economist Kenneth Rogoff discusses inflation, the administration's handling of the economic pressures, the CBO estimate on Biden's Build Back Better plan and the president's Fed Chair pick.
"It isn’t just technically what’s going on, but it’s the backdrop of this enormous pressures on the Federal Reserve," the economist said.
"I think we haven’t seen them since the 70s, the pressures to be easy on monetary policy," he said.
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FOX Business’ Megan Henney contributed to this report.