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Escalating Russia-Ukraine crisis could help the Fed engineer a soft landing
Fed raising rate amid Russia-Ukraine conflict may result in ‘recession’: The Bear Traps Report founder
The Bear Traps Report founder and editor Larry McDonald discusses how the Russia-Ukraine conflict is impacting U.S. markets.
The rapidly escalating tensions between Ukraine and Russia have cast fresh uncertainty on the Federal Reserve's policy outlook and could force central bank officials to take a more nimble approach as they begin raising interest rates for the first time in three years.
JPMorgan Chase strategist Dubravko Lakos-Bujas wrote in an analyst note to clients this week that the simmering crisis in Eastern Europe has added to the Fed's slew of worries – including the hottest inflation in four decades. The conflict could ultimately lead central bank policymakers to consider a less hawkish pivot as they prepare for interest rate liftoff.
LIVE UPDATES: RUSSIA-UKRAINE CONFLICT CONTINUES TO ESCALATE
"Overly restrictive monetary policy could result in an outright policy error especially if the business cycle continues to deteriorate," Lakos-Bujas wrote in the note. "At the same time, the Russia/Ukraine crisis could force a reassessment of the Fed tightening path resulting in central banks turning less hawkish, while policymakers may consider additional fiscal stimulus."