US Fed Cannot Fix Runaway Inflation by Itself Amid Global Supply Chain Failure, Investor Says

WASHINGTON (Sputnik) - The US Federal Reserve alone is unable to curb the country's runaway inflation and should not be held responsible for the situation, as it operates amid global supply chain disruptions, Kyle Shostak, the director of US investment company Navigator Principal Investors, said.

Russian President Vladimir Putin said on Thursday that the US Federal Reserve System would eventually have to adjust its monetary policy to bring down the current inflation rates.

"In a nutshell, the Fed's signature stroke, a rate hike, will only do its best somewhere when the supply chain is going to show strong signs of recovery. So, blaming the Fed on being late or weak isn't getting us anywhere," Shostak said.

According to the finance specialist, the problem lies in the enormous and ongoing disruption of the economy across almost all sectors and the Fed does not have an easy fiscal response.

"The Fed can help ease inflation when it comes to labour costs and housing market but it is helpless in dealing with the disasters caused by the global supply chain breakage," Shostak explained.

The Navigator Principal Investors president went on to state that the real interest rate is close to 6.8%, with the spillover effect of that "being felt by emerging markets economies around the world, including Russia."

The United States is currently going through the fastest inflation it has seen in almost 40 years, with US consumer prices spiking by 5.7% in November compared to the same period a year ago.