Fed and Bank of England raise rates Bank of England warns of recession

Well so much for raising rates to kill inflation without causing a recession.The stock market on Wall street clearly disagreed and today saw a broad sell off of stocks leading to a drop in the S and P 500 of 186 , close to 6% in the NASDAQ and over 1300 fall in the Dow with bearish expectations widespread even in high tech stocks. I am not surprised since any study of irrational expectations and market behaviour understands that irrationality dominates behaviour both on the way down and on the way up.Furthermore Chairman Powell decided to raise rates substantially without properly taking into account and demonstrating that raising unemployment is an appropriate solution to supply chain , wartime price pressures and the cartel nature of energy markets. West Texas oil is around $108 barrel. So expect further trouble on the policy front over the next six months.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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