US Fed now risks too-slow taper after too fast in 2013, says Raghuram Rajan

One of the leading global critics of the Federal Reserve’s 2013 “taper tantrum” episode is now worried that the central bank could fall behind the curve as it gradually removes Covid-era monetary stimulus.
 

“The Fed thinks it has time” to slow-walk the tightening process, especially given longer-term disinflationary forces like aging, automation and globalization, Raghuram Rajan said in an interview with Bloomberg Television’s Kathleen Hays and Haidi Straud-Watts Tuesday morning in Asia. 

But compared to the aftermath of the Global Financial Crisis, “there’s one big difference post-pandemic, which is the enormous amount of fiscal spending,” said the University of Chicago economist