Wharton’s Nikolai Roussanov and Peter Conti-Brown unpack inflation trends and the lessons from previous Federal Reserve actions.
by Shankar Parameshwaran
Knowledge at Wharton
The higher-than-expected January indices for consumer prices and producer prices have reignited the debate on the Federal Reserve’s options to achieve price stability without hurting employment. Two Wharton experts delved into those issues on the Wharton Business Daily podcast (listen here): Nikolai Roussanov, finance professor, broke down the latest inflation trends. Peter Conti-Brown, professor of legal studies and business ethics, identified lessons from the Fed’s actions in previous episodes of high inflation.
Nikolai Roussanov on Inflation and the Fed’s Options
Immediate rate hike unlikely: The Fed may not raise interest rates unless inflation worsens alarmingly. The markets had reacted to the latest CPI (Consumer Price Index) data with the expectation that the Fed will pause rate cuts for even longer than perhaps was anticipated. However, they seem to be shrugging off the PPI (Producer Price Index) reading of 3.5% year-on-year.