Founder of Interactive Brokers: The Fed will raise interest rates to 6% to stop inflation

Thomas Peterffy, a billionaire and founder of Interactive Brokers, recently said that if the Fed really wants to stop inflation from rising, raising interest rates to 1 or 2 percent won't help.

He said in an interview: "I am concerned about high interest rates because the Fed is discussing raising interest rates to 1% or 2%. Inflation is 7%, and it doesn't make sense to (raise rates to) 1% or 2%. If they really want to stop inflation, they're going to have to raise interest rates to 4 percent, 5 percent, 6 percent. ”

But Petrfield argues that the Fed will not raise interest rates so high for now because the cost of service from America's ballooning debt will rise, which will increase new deficit spending. More money may circulate into the economy, putting more upward pressure on inflation,

Petrfield added: "I think they (the Fed) are in a dilemma. They can't raise interest rates to well above 1% or 2%, and inflation will stay there for a long time, people will get used to that, and it will become an epidemic. So that's why I'm scared. ”

This article originated from the Financial Associated Press