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Mark Zandi, chief economist at Moody's Analytics, questions the Federal Reserve's recent decision to hike interest rates, stating that economic performance does not support such a move.
He suggests the rate increase may be intended to assert the central bank's independence following the appointment of a new chair. Zandi notes that while U.S. President Donald Trump has publicly called for lower rates, the Federal Open Market Committee (FOMC) instead opted for a rate hike.
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Earlier this year, Zandi warned that the risk of a Federal Reserve policy mistake was rising as markets anticipated further rate hikes despite 2% U.S. GDP growth (link). He has also linked long-term U.S. interest rate increases to geopolitical events, noting higher levels not seen since the financial crisis (link). Both comments come amid ongoing discussions about the central bank’s policy direction.