Fed Hikes Not Over: Economy ‘Can’t Deal’ With What Comes Next | Komal Sri-Kumar

The Federal Reserve’s recent 25-basis-point interest rate hike fails to address the primary drivers of inflation, specifically the $40 trillion national debt and $2 trillion annual deficit. Komal Sri-Kumar, president of Sri-Kumar Global Strategies, argues that this policy action is politically constrained, as a more aggressive 50-basis-point increase was necessary to curb inflation effectively. Bond yields remain elevated because the Treasury’s recent buyback efforts were insufficient to counter the massive supply of government securities. Furthermore, the economy faces mounting pressure from high mortgage rates and the competitive demand for capital between AI-driven corporate investment and government borrowing. Without structural fiscal reforms, such as entitlement spending cuts or tax adjustments, the Federal Reserve will likely be forced to continue hiking rates well into 2027 to combat persistent price pressures, despite current projections suggesting otherwise.