The Fed should pause interest rate rises as US inflation slows | Joseph Stiglitz and Dean Baker

It would be irresponsible to create much higher unemployment – and the US economy could be pushed into recession

The US Federal Reserve Board will meet again on 20-21 September, and while most analysts expect another big interest-rate rise, there is a strong argument for the Fed to take a break from its aggressive monetary-policy tightening. While its rate increases so far have slowed the economy – most obviously the housing sector – their impact on inflation is far less certain.

Monetary policy typically affects economic performance with long and variable lags, especially in times of upheaval. Given the depth of geopolitical, financial and economic uncertainty – not least about the future course of inflation – the Fed would be wise to pause its rate rises until a more reliable assessment of the situation is possible.

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