Timing of Fed rate cut

This refers to ‘Are we heading towards higher inflation globally?’(March 28). The current dilemma faced by the US Federal Reserve appears to stem from a lack of coordination between fiscal and monetary policies. This discord has compelled the Fed to determine the timing of rate cuts independently. Among the four influencing factors indicated, global developments stand out due to their significant impact on inflation, necessitating robust fiscal measures for containment. Regrettably, these global dynamics are heavily influenced by political factors such as tariff escalations, sanctions, and policy stances towards China. These political undercurrents are likely to persist, leaving the Fed with limited immediate option.

The concern arises whether the US will once again lag behind in adjusting interest rates, reminiscent of the postCovid pandemic scenario. It’s time for the US Fed to take a call on whether inflation is transitory or entrenched in real time.

Chennai capacity of the economy to generate more productive forms of employment remain. While reaping the demographic dividend would require more productive forms of employment for the country’s youth, there are numerous challenges as the production process has become more capitalintensive and laboursaving. Given that the issue of job creation has been central to India’s development project, it is time we adopted a multipronged strategy, from ensuring quality education and skills to facilitating largescale labourintensive manufacturing to absorb the millions of low and semiskilled workers.

Sholavandan, TN