Bloomberg Surveillance · Monday, July 27, 2026
Joseph Lavorna criticizes the Federal Reserve's monetary policy, arguing that focusing solely on demand ignores critical supply-side issues that can exacerbate inflation. He points to the Fed's past rate cuts as a response to perceived downside risks in the labor market, which may now be counterproductive given current inflationary pressures.
“So if you're setting monetary policy purely to the demand side, and then you have a supply issue which could only further ingrain some of those concerns about inflation, you're supposed to a minimum take back those those cuts.”
“First of all, if you go back to last year, the FED was cutting rates seventy five bases points in the fourth quarter, because it was almost September October December, they were worried about downside risks to the labor market, and the inflation outlook was still relatively benign.”