Rate hikes may increase inflation by boosting costs, Tom McClellan argues

Rate hikes may increase inflation by boosting costs, Tom McClellan argues
Rate hikes may boost inflation costs

Tom McClellan questions the effectiveness of rate hikes in controlling inflation. He suggests that raising interest rates increases the cost of capital—considered a price input that can feed into inflation—and notes that higher energy costs have a similar effect. McClellan argues that addressing higher energy costs by hiking rates may not resolve inflation and could reinforce price pressures instead.

McClellan has previously clarified the need to follow the original methodology when calculating the Zweig Breadth Thrust indicator. He also identified an oversold signal when the VIX Index moved above all of its futures prices, suggesting a potential price bottom in the market according to his analysis earlier this year. These earlier observations reflect his focus on technical accuracy and market signals.

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