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As reported by CNBC, Yale’s Stephen Roach has noted that the Federal Reserves pace of rate hikes may not be fast enough.

Key highlights

Inflation risks are mounting and the Federal Reserve’s “glacial” normalization pace isn’t adequate to cope with it, Yale University’s Stephen Roach warned on Thursday.

“Supply chains have been a major force holding down global and U.S. inflation, and they are being unwound by tariffs on China,” he said on CNBC’s “Power Lunch.”

Those tariffs will hit China-centric supply chains, while the revision to NAFTA will raise the price of North American vehicle costs, he explained.

Domestically, the 30-year low in the unemployment rate is finally leading to wage pressure and that will pose problems for earnings in an overvalued stock market, added Roach, who served as Morgan Stanley Asia chairman for five years.

Roach said if the Fed sticks to the course of action it has laid out thus far, it will be behind.  “The Fed has to be forward-looking. They have to set rates today with an eye toward where core inflation is going to be 12 to 18 months out,” he said. “Today, the so-called forward-looking federal funds rate is identical to the backward-looking core-inflation rate.”