Stephen Roach is a former chairman of Morgan Stanley.
He warns that the U.S. is on a path that leads to higher prices and slower growth.
Roach told CNBC that the inflation problem is widespread and likely to last for a long time. That just shows how deep the hole is for Powell.
Roach, a senior fellow and former Federal Reserve economist, calls the peak inflation debate absurd.
He said that the demand side has gotten away from the Fed.
Roach thinks inflation will stay above 5% through the end of the year. The Fed wouldn't meet that level at the current pace of rate hikes.
50 basis points doesn't cut it. The markets are not comfortable with that conclusion.
For the first time in more than 80 years, the Dow is on pace for an eighth negative week. The S&P 500 and the tech-laden Nasdaq are in the midst of their worst weekly losing streaks since 2001.
Roach sounded the alarm on 1970s-type inflation risks two years ago during the early stages of the pandemic. The country's enormous debt, historically low interest rates and easy money policies were listed by him.
His warning was louder on CNBC. Roach said the U.S. was one supply chain glitch away from deflation.
There are more reasons to be on alert.
Roach said that he would add to the zero-covid in China along with the repercussions of the war in the Ukraine.
Chris was a contributor to this report.
There is no truth to this.
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