Fed official warns against hiking rates too quickly

Higher interest rates are needed to help cool demand and rein in sky-high inflation, but the Federal Reserve must take care not to hike too quickly, a US central banker said Monday.

Kansas City Fed President Esther George warned that going too fast can be “unsettling” and has raised concerns about a possible recession.

The Fed’s policy-setting committee last month announced the biggest rate hike in nearly 30 years, but George dissented from the decision, preferring a smaller increase.

“Moving interest rates too fast raises the prospect of oversteering,” she said in a speech at a conference in Missouri.

George explained that markets rates already were increasing in response to the Fed’s stated intention to hike the benchmark lending rate.

“Communicating the path for interest rates is likely far more consequential than the speed with which we get there,” she said.

Facing the fastest inflation in more than four decades, the US central bank began raising rates off zero in March, and hiked three-quarters of a point in June while signaling another similar increase was possible this month.

Some officials, including Fed Governor Christopher Waller, say the committee should increase rates quickly and then reassess later in the year.

However, George said while she is sympathetic to the view the Fed needs to act fast, she cautioned that “significant and abrupt changes can be unsettling.”

“This is already a historically swift pace of rate increases for households and businesses to adapt to, and more abrupt changes in interest rates could create strains, either in the economy or financial markets,” she said, noting rising warnings about a coming recession.

In addition, given the uncertainty about how the economy will react “it is unclear just how high rates will need to move in order to bring inflation down,” she said. — Agence France-Presse

US sanctions crypto ‘laundering’ service Tornado

The United States placed sanctions Monday on Tornado Cash, a leading “crypto mixer” for transactions in virtual currency that US officials describe as a hub for laundering stolen funds, including by North Korean hackers.

US sanctions crypto ‘laundering’ service Tornado

The United States placed sanctions Monday on Tornado Cash, a leading “crypto mixer” for transactions in virtual currency that US officials describe as a hub for laundering stolen funds, including by North Korean hackers.

US sanctions crypto ‘laundering’ service Tornado

The United States placed sanctions Monday on Tornado Cash, a leading “crypto mixer” for transactions in virtual currency that US officials describe as a hub for laundering stolen funds, including by North Korean hackers.