Economic Disaster: Feds Fighting Hopelessly Against Upcoming Recession

By Eliana Regev | Monday, 25 July 2022 15:45
3
Views 3.3K

U.S. central bankers face a worsening condition act as they struggle to curb soaring inflation while still maintain the economy's growth, though they have made it clear they are ready to risk a recession.

However, with war still ravaging through Ukraine and with COVID-19 causing continuous issues in Asia, avoiding an economic downturn will require uncertainty and depend on many factors outside the Federal Reserve's control.

As American families struggle to make ends meet amid surging prices for gas, food and housing, Fed officials have made clear that fighting inflation is their top priority — even if that means inflicting pain.

The Fed will maintain its two-day policy meeting beginning Wednesday, when it is expected to hike the benchmark borrowing rate by another three-quarter of a percentage point in its aggressive campaign to cool demand and ease price pressures.

 OHIO MINIMUM WAGE INCREASE TO TAKE EFFECT NEXT YEARbell_image

Despite a healthy job market with near-record low unemployment, workers are catching their wage gains overwhelmed by consumer prices that rose by a new 40-year high of 9.1 percent in June.

Slowing the economy is expected to cause more job losses, but policymakers wish to evade at all costs the harsh pain of a price spiral that becomes entrenched or spins out of control.

 MUST WATCH VIDEO: HOW MUCH MONEY FAUCI MADE DURING COVID?bell_image

Treasury Secretary Janet Yellen, herself a former Fed chief, has previously cautioned that such a soft landing will need good luck. On Sunday she stressed again that while "growth is slowing," data does not necssarily point to a recession.

"I'm not saying that we will definitely avoid a recession, but I think there is a path that keeps the labor market strong and brings inflation down," she told NBC.

 AMID POWER OUTAGES, CUBA COMES TO U.S. FOR HELPbell_image

Former Fed vice chair Donald Kohn told AFP it was a "very complicated, multidimensional issue," especially due to the ongoing supply chain uncertainty.

After flooding the world's largest economy with support during the pandemic — zero interest rates and a steady stream of liquidity into the financial system — Fed policymakers were praising themselves on how fast the economy rebounded, regaining millions of jobs in a matter of months.

 VIDEO: BILL MAHER WOKENESS TIME MACHINE MONOLOGbell_image

But they were caught flat-footed by the rapid run-up in prices, as Americans flush with cash due to massive government aid went on a spending spree, buying up cars, houses and other goods at a time when the global supply chain was still bogged down by pandemic lockdowns that continue in China.

 JUSTICE COMING: MAN WHO RAN DOWN REPUBLICAN IN NORTH DAKOTA CHARGED WITH MURDERbell_image

The Fed eventually began liftoff — taking the policy interest rate off zero — in March, starting with a 25-basis-point increase, followed by 50 in May and 75 in June.

Higher lending costs make it more expensive to borrow funds to buy cars and homes or expand businesses, which should cool demand, while also making it more attractive to save rather than spend.

MEMES

Meme-0268
Meme-0267
Meme-0266

FLIPBOOKS