KPMG: Federal Reserve Expected to Hike Rates in the Second Half

BlockBeats News, April 3rd, the Iran conflict has escalated the global economic stagflation risk. Diane Swonk, Chief Economist at KPMG, stated that once stagflation takes hold, a "deep recession" may be the only way out. Stagflation is a worrisome economic scenario characterized by persistently high inflation and weak economic growth.

Swonk said: "The blockade of the Strait of Hormuz and the resulting surge in oil prices have had an impact beyond a simple oil shock." She believes that the current situation's impact is more severe than any previous oil crisis in history. This directly raises various costs, leading to price hikes, while business hiring intentions have plummeted, affecting the job market. With multiple intertwined factors, the risk of stagflation continues to rise.

Swonk's view is in line with market investors. She explained: "The likelihood of a Fed rate hike in the second half of the year is rising, and I expect the Fed to be forced to take this step, with other central banks following suit." (Jinse)