The Federal Reserve’s slow response to persistent inflation will end up in a serious financial crisis, The Home Depot co-founder Ken Langone predicted. 

The regulator already has no other choice but to raise interest rates to bring inflation to the target level regardless of the situation in the jobs market. 

According to Langone, the US central bank messed up at the onset of inflation when more could have been done. Now the United States will have to pay the price as an economic disaster is looming. 

In 2021, US inflation already twice exceeded the 2% target. Yet, the Federal Reserve decided to postpone rate hikes until March 2022, while it should have tried to slow down price growth as early as possible.

Nowadays, the interest rate is at 4.5%. Higher rates are believed to keep prices down as borrowing costs rise, and saving is prioritized over spending. However, that could also trigger a crash in asset prices, severely limit demand, and boost unemployment. All these factors are the precursor to an economic downturn. 

Langone suggests that as many as 2 million Americans could lose their jobs if inflation keeps on rising.