In the Market: Amid the calm, the Fed brews the next storm

The Federal Reserve’s hawkish outlook on interest rates may increase the likelihood of a “crash landing” in the economy rather than a “soft landing”, according to experts. Raising short-term policy rates could lead to problems, which would be “damned if they do and damned if they don’t”, according to former head of the Reserve Bank of India, Raghuram Rajan. Kashkari of the Federal Reserve Bank of Minneapolis and fellow committee members believe the effects of inflation need to be tightly controlled. Market observers have cited life insurance, private markets and loan funds as areas of concern, although there is little transparency in these sectors.