The Chicago Fed announced that the US will achieve the expected result in inflation and that there will be an inflow of money into risky assets such as cryptocurrencies.
Chicago Federal Reserve Bank (Chicago Fed) economists stated that the US will be successful in its economic policy and there will be no need for further tightening. Economists pointed out that with the expected decrease in inflation, money inflows may occur into investment instruments such as crypto currencies.
“No further tightening will be needed”
Economists at the Federal Reserve Bank of Chicago conducted a new study. This research suggested that the US Federal Reserve’s interest rate policy would reduce inflation without causing a recession. Pointing to an inflation rate of 2 percent, economists stated that more money could be injected into risky asset products such as crypto currencies.
Economists Stefania D’Amico and Thomas King said that the 500 basis point interest rate increase caused distress in the economy. Economists who cite recession concerns predict that further tightening will not be needed and inflation will decline.
“While the majority of the impacts on output and inflation have already occurred, we estimate that the policy tightening currently implemented will create more restraints in the coming quarters and put downward pressure on real gross income by about 3 percentage points,” the Chicago Fed research report said. 2.5 points at the level of domestic product (GDP) and Consumer Price Index (CPI).
As a result of falling inflation and a resilient economy, it is on the agenda that risks will begin to be taken in global financial markets. Chicago Fed economists think that assets such as cryptocurrencies will become more prominent.
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