US risks slipping back into secular stagnation, says Rajan

Fed has “good chance” of defeating inflation but US economy has deeper problems, economist says

Raghuram Rajan
Raghuram Rajan
WEF/Eric Miller

The US is likely to bring inflation under control over the next two years but might find itself mired in the same stagnation as before Covid-19, Raghuram Rajan said today (July 6).

The former Reserve Bank of India governor said he believed the Federal Reserve had a “fairly good chance” of bringing US inflation back down to its target over the next two years. The US has relatively low rates of unionisation, which will likely help prevent a wage-price spiral developing, Rajan told a conference

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