Economist Projects Fed Rate Hikes Despite Gradual Inflation Decline

Harvard University professor Karen Dynan stated that the U.S. economy is expected to remain fairly resilient in the coming year, despite global challenges and trade tensions putting upward pressure on prices. Dynan noted that while global growth is projected to slow, growth in artificial intelligence has helped carry both the U.S. and global economies forward. She also linked higher energy prices stemming from wars in the Middle East to expectations of continued Federal Reserve rate hikes.

Dynan, who previously served on the staff of the Federal Reserve Board and reviews Fed policy, expects the Federal Reserve to continue raising rates. This outlook is set against a backdrop of global economic slowing and persistent energy price pressures from the Middle East.