Former U.S. Treasury Secretary Steven Mnuchin saidInflation will force the Fed to tighten monetary policy in the coming months and years, a situation that investors may not be ready for.。
"there is no doubt that the Fed needs to enter a period of normalizing interest rates and normalizing bond holdings," Mr Mnuchin said in an interview on Monday.
Mnuchin said he was concerned that the recent surge in inflation would continue. He suggested that the Fed was cautious in part because the economic models it relied on were difficult to incorporate large-scale fiscal and monetary policy measures that stimulate prices.
Mnuchin concluded: "I think this is something that needs to be watched very carefully. I really think the market underestimates this risk."