"Experts predict higher interest rates as the Fed's monetary policy loses potency"

Economist Richard Koo argues that the Federal Reserve's monetary policy has lost its effectiveness in influencing the US economy, suggesting that interest rates may need to be raised significantly higher than expected. This could potentially trigger a selloff in stocks and bonds. Koo attributes the Fed's diminished power to the buildup of excess bank reserves resulting from years of easy money policies. He suggests that if the Fed wants to slow the economy and control inflation, interest rates will need to be raised to a level that discourages borrowing.