Mike Green | CNBCThe Federal Reserve "didn't do their homework" and mischaracterized the spike in inflation that has plagued the U.S. economy over the last two years, according to Nobel Prize-winning economist Joseph Stiglitz.
The Fed didn't start hiking rates until March 2022 and Chair Jerome Powell repeatedly insisted that inflation was "transitory," indicating that it could be easily tamed.
watch nowInstead, Stiglitz said that the price rises were often driven by other factors, such as a shortage of key components like semiconductor chips.
In an effort to drag inflation back down towards its 2% target, the Fed has now hiked interest rates 11 times in total to a target range of 5.25%-5.5%, the highest level for more than 22 years.
American auto companies forgot to put in orders for chips, and for want of a chip, you can't make a car."
Persons:
Mike Green, Joseph Stiglitz, Jerome Powell, Stiglitz, CNBC's Steve Sedgwick
Organizations:
CNBC, Federal, Fed
Locations:
U.S