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Rate Hikes Alone Won't Curb Inflation

Because America's sky-high inflation rate is driven heavily by supply-side shortages, it will not be brought down by demand-suppressing monetary policies. The situation cries out for measures to ease supply-side bottlenecks and increase the number of available, willing workers.

NEW HAVEN – As inflation in the United States reaches new heights, economists are debating how high the Federal Reserve will need to hike interest rates to curb demand and rein in price growth. Some commentators believe that the Fed will need to be as aggressive as Fed Chair Paul Volcker in the early 1980s, who ended up raising interest rates to as high as 20%.