InDependent Strategy’s investment company David Rosh in an interview with CNBC warned about the rapid sharp price increase in the USA.
According to the financier, by the middle of 2022, the inflation rate in the United States can reach 3-4 percent per annum – with targeted indicators of the Federal Reserve System (Fed) in two percent.
“And this is completely incompatible with, say, the yield of the 10-year US bonds at 1.6 percent. This yield can easily double, and when it happens, you will come to a critical point that markets will be experienced,” said Roche .
One of the reasons for high inflation, according to him, is to excessive demand from consumers – due to the coronavirus savings accumulated during the pandemic, and the dedicated subsidies from the government. The Last President Joe Biden’s Assistance Packet Economics provides for the allocation of households a total of 300 million dollars.
The danger of too high inflation is to reduce the purchasing power of the population, as well as in the rise in price of borrowing for the state and business (since investors agree to invest only on terms covering prices). At the same time, the Fed, like most other central banks, seeks to maintain inflation at a certain level to ensure stable economic growth.