Jerome Powell, chair of the Federal Reserve, announced on Wednesday that he would raise his rate by.75% in order to stop inflation from rising further.
Federal Reserve has released a statement regarding the decision and to prepare consumers for possible rate rises. They. were sure to sandwich in a little “Putin’s Price Hike” talk to boot.
Recently, indicators of production and spending have slowed. The unemployment rate is still low and job growth has been strong in recent months. Due to increased supply and demand due to pandemics and higher energy and food prices as well wider price pressures, inflation remains high.
Russia’s war against Ukraine is causing tremendous human and economic hardship. Inflation is being impacted by the conflict and other related events. Inflation risk is a concern that the Committee pays close attention to.
In order to maximize employment and maintain inflation rates of 2 percent for the long-term, the Committee aims to do so. To support these goals, it decided to increase the target range of the federal funds rates from 2-1/2 to 2-1/4 percent. The Committee anticipates that future increases to the target range are appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee remains committed to returning inflation back to 2 percent.
While the Biden administration is quick to invoke Putin when it comes to the sagging economy, the word they refuse to land on is the one word on everyone’s mind these days…recession. They have even gone so far as to change the definition of “recession” at the White House so that it conveniently avoids meaning what it is supposed to mean.
During the Q&A session following the announcement, Powell did utter the unutterable, but only to tell us that he is sort of, maybe, possibly convinced that he might not think we’re really in kind of a recession.
We are not trying to create a recession. We do not believe we need to. … I think it’s important that we address this now. … I do not think the U.S. is currently in a recession.” — Fed chair Jerome Powell
— Christopher Keating (@chrispkeating) July 27, 2022
“We’re not trying to have a recession?”
Not a reassuring statement from the man who’s job is to reassure consumers and lenders. These words sound like someone who’s worried about his nose growing fast.
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