Fed may have to speed up rate rises, Australian governor warns
Philip Lowe says fiscal stimulus could lead to US inflation growing faster than expected
The Federal Reserve may have to raise interest rates quicker than expected to deal with the recent budget deal, Australia’s central bank governor said.
“The US economy is experiencing a sizeable fiscal stimulus at a time of limited spare capacity,” Philip Lowe told Australian lawmakers on August 17. The Reserve Bank of Australia governor said this could result in a “larger-than-expected pick-up in inflation in the United States”.
The Congressional Budget Office estimates that the budget agreed
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