Federal reserve's printing policy to blame for unprecedented inflation: Investor

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Navigator Principal Investors Director Kyle Shostak says the US Federal Reserve's effort to limit massive inflation is at least six months late and is caused by its own money-printing policies.

The Federal Reserve had previously indicated on Wednesday that it would be prudent to raise interest rates soon, owing to inflation exceeding the objective of the central bank by 2%. 

The situation has clearly irritated US President Joe Biden, as he sarcastically responded to a Fox News reporter's question on inflation by saying, "It's a great asset - more inflation," before shaking his head and adding, "What a stupid son of a bitch!"

Shostak expressed, "It is a little bit late at this stage to shift gears as they should have done… a half a year ago," referring to the inflation as an "ugly child" of the money-printing policy.

The Director says the US is at risk of experiencing a growth shock, which holds ramifications not only for the US economy but the whole world, noting that the time has passed for the Fed to "contain the rise of the monster it has created."

According to Shostak, Trump and Biden pumped large sums of money into the economy to combat the pandemic and no one should expect salaries to increase at a rate of 4% per year, real estate 13%, and equities markets to expand at a rate of 20% indefinitely.

He contrasted the global economy to healthcare, noting that the Fed is responsible for both. 

"Growth prospects in emerging economies are hence becoming much more uncertain," he said.

Noting that some currencies are already falling against the dollar, he said, "Many countries are struggling to come out of Covid, with their public budgets on the brink of exhaustion. The inflation is making consumers poorer while sovereign and corporate debt is piling up."