Can the Fed control inflation without hikes

Reports indicate that the U.S. Federal Reserve has multiple tools to implement monetary tightening without necessarily raising the official interest rate. These include reducing its balance sheet and managing liquidity through decreased bond purchases and shrinking bank reserves. Opinions suggest that these tools may not be fully effective as alternatives to interest rate hikes, and their use aims to curb inflation and reassess market prices before formal decisions are made. Such measures could have potential impacts on borrowing costs, bond markets, and real estate, as well as on Arab economies linked to the dollar.

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