Inflation hasn't cooled because of the Federal Reserve's interest-rate hikes, Paul Krugman says.
Still, the US economy might be in worse shape today if the Fed hadn't raised rates, Krugman says.
Those forces plateaued more than a year ago, but have only been reflected in recent months due to lags in inflation measures, Krugman said.
"This suggests to me that the Fed may have done the right thing for the wrong reasons," Krugman said.
He explained that surprisingly resilient US demand could indicate the Fed stopped the economy overheating and inflation surging by raising rates, which allowed recombobulation to relieve pricing pressures.
Persons:
Paul Krugman, it's, Krugman, —, recombobulation
Organizations:
Service, New York Times, Fed, Princeton, MIT
Locations:
Wall, Silicon