The Federal Reserve’s efforts to battle inflation by rising interest rates and killing demand may have limited results as long as the supply side of the inflation problem won’t be fixed, according to macro analyst Lyn Alden.

“Until they actually fix the supply side of certain things, like energy especially, but commodities broadly and logistics infrastructure, until that is improved, it’s hard to have a more persistent fix to the inflationary problem”, Alden told Cointelegraph in an exclusive interview.

Jerome Powell’s speech at Jackson Hole sent a clear signal that the Federal Reserve is determined to continue its efforts to tame inflation, bringing it down to a target of 2%. That will be achieved at the cost of more pain inflicted on the economy, higher unemployment, and the risk of a recession.

“They’re going to tighten until they break something or until they cause recessionary enough conditions. And at that point, they might pivot”, Alden explained.

Until the Fed won’t pivot its interest rates policy, the crypto markets are unlikely to recover, pointed out Alden. In the long run, the central banks will be unable to preserve positive interest rates, mainly because of the  high level of public debt that is burdening the most developed economies.

“A lot of the major developed countries have an inability to get to positive real rates and hold it there”, said Alden.

That, according to Alden, will favour scarce assets such as Bitcoin in the long run.

This article was originally published on cointelegraph.com