An economics professor at Harvard University predicts that uncontrollable inflation will make life difficult following a sustained recovery in 2010, according to Bloomberg. Professor Martin Feldstein says that though the economy will indeed turn around next year, it will be up to the Federal Reserve to stem a dramatic increase in pricing.
In an interview with Bloomberg Radio, Feldstein also said it would be difficult for the U.S. central bank to clean up its balance sheet from the toxic mortgage-related securities that it has purchased from ailing financial firms. These securities will be difficult to sell, thus limiting the Fed’s ability to deflect the threat of inflation.
Feldstein served from 1982 to 1984 as chief economic advisor to Ronald Reagan, as well as chairman to the Council of Economic Advisers during that period. He currently serves on Obama’s President’s Economic Recovery Advisory Board.