Ken Langone, one of the co-founders of retailer Home Depot, believes that the Fed’s slow rise in interest rates has led to uncontrolled inflation, so a major financial crisis is inevitable. In their opinion, the only thing left for the Fed to do in this situation is to raise rates quickly until inflation is suppressed, even if unemployment rises sharply in the process, writes Business Insider. We are also seeing problems with the S&P 500. 

According to him, the Fed “missed the mark by not suppressing inflation early on, and now economic disaster is near.”

“The situation is out of control now,” he said. – Frankly, I don’t know how we can prevent the serious financial crisis we are now in.”

U.S. inflation was already more than double the central bank’s target of 2% in 2021, but despite that, the Fed delayed raising interest rates until last March, believing that price pressures were a temporary byproduct of the post-pandemic economic recovery. Instead, it should have raised rates as early and as quickly as possible to stem the rise in prices.

As a result, the rate rose from nearly 0 to 4.5 percent today. A high rate usually curbs price growth because it raises the cost of borrowing and encourages saving rather than spending. However, it can also collapse asset prices, limit demand, and increase unemployment, increasing the risk of a recession.

According to Langone, about 2 million people could be out of work, “but it’s not clear how to address inflation. Meanwhile, the poorest people are the hardest hit by rising prices.

Earlier, we reported that Chinese company BYD lost $18 billion because of discounts from electric car maker Tesla.