Jakarta, CNBC Indonesia- The aggressiveness of the US Central Bank’s policy, the Fed, in raising its benchmark interest rate to suppress inflation, which has not yet ended, still raises concerns on global financial markets. Effects of an increase in the Fed Funds Rate This also mentions the exchange rate crisis in a number of developing countries
Nobel Prize winner in Economics, Joseph Eugene Stiglitz, considers the Fed’s aggressive move to raise interest rates from near zero to 5.5% a major misdiagnosis. The Fed believes that inflation conditions are caused by soaring demand considering that the majority of inflation can be overcome if supply problems are overcome.
Stiglitz also assessed the impact of the Fed’s increase in interest rates on developing countries. Where the response of the World Bank and the IMF to increase loan interest rates makes it difficult for developing countries to pay their debts, even though the role of the IMG and the Bank is to help these countries.
How do economists see the accuracy of the Fed’s policy direction in the benchmark interest rate? What is the global impact? For complete details, see Shinta Zahara’s dialogue with Nobel Prize Winner in Economics, Joseph Eugene Stiglitz and Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS), Purbaya Yudhi Sadewa at Power Lunch,CNBCIndonesia (Tuesday, 12/09/2023)