The Federal Resreve is trying to drive down inflation….
They ain’t doing a good job….
The prblem IS consumer prices….
Not home mortgages or car loans…..
Or even gas prices….
A Recession IS also brewing on top of this…..
The message came after the central bank raised rates by 0.75 percentage points for the third time this year and released new economic projections showing a significant slowdown in the economy later in 2022 and 2023. People are suffering from high inflation — especially more vulnerable households, Powell said — and they’ll ultimately suffer more, and for longer, if the Fed flinches in its commitment to pulling prices back down.
That could mean a recession, job losses, higher credit costs or other unknown consequences. But Powell said letting inflation continue would be worse and that “delay is only likely to lead to more pain.”
The bank’s new projections — including for meager economic growth and rising unemployment — indicate that officials expect their year-long campaign to raise interest rates will have its intended effect soon. But Powell also said the Fed would “keep at it until it’s done” and gave no indication that the bank is ready to ease up on its policies.
“What they don’t want to be doing is halfway fighting inflation now, and then backing off and having to do it again when higher inflation expectations have become more entrenched,” said Stephanie Aaronson, vice president and director of the economic studies program at the Brookings Institution and a former Fed economist. “That would be very painful.”
This month’s rate hike was the fifth of the year, and the third consecutive three-quarter point hike. Such an increase would have been considered outlandishly large until recently. But the Fed has been in a race to push rates past the “neutral” zone of roughly 2.5 percent, where rates don’t slow or juice the economy, and into “restrictive territory” that dampens consumer demand….