'An Abject Failure': Fed's 10th Interest Rate Hike Comes as Recession Concerns Mount and Banks Fail
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WASHINGTON, D.C. – Interest rates went up a quarter point on Wednesday, but the Federal Reserve is signaling going forward they may pause rate hikes after their streak of 10 in a row.
"Our future policy actions will depend on how events unfold," declared Federal Reserve Chairman Jerome Powell.
The Fed hopes their string of rate hikes will help bring down inflation, but now they'll step back and assess if it's time to pause the rate hikes amid growing concerns. Powell said they'll be monitoring factors like the recent bank failures to see if it's time to cool the rate hikes, but he expressed confidence in the system.
"Conditions have broadly improved and the U.S. banking system is sound and resilient," Powell said.
The 10th consecutive interest rate hike comes amid renewed fears that the Fed's ongoing effort to combat persistent inflation could push the U.S. into a recession, an outcome Powell acknowledged.
"It's possible that we will have what I hope would be a mild recession," said Powell.
Joel Griffith from the Heritage Foundation argues the Fed plays a key responsibility in creating today's inflation in the first place.
"The Federal Reserve has been an abject failure, particularly over the last few years," Griffith told CBN News. "What we need is for the Fed to actually be honest with the public, admit that they made a mistake in printing these trillions of dollars, and point out that Congress has been overspending and Congress has been demanding that they print more money. We have to get our federal spending under control and the Federal Reserve needs to stop enabling these big spending politicians."
Big spending is a big issue in Washington right now, with Congressional Republicans wanting limits on future spending as a condition for raising the government's debt ceiling, while President Biden wants to increase the debt cap with no conditions.
"The president and the speaker need to reach an agreement to get us past this impasse," said Senate Minority Leader Mitch McConnell (R-KY).
For the moment, inflation and higher rates remain the top concern for most Americans as the Fed's rate hikes have spilled over into the economy driving up the cost of mortgages and car loans, along with credit card interest rates which are also at a record high of 20 percent. All these things have been hitting consumers in their pocketbooks.
Griffith says the average American family is seeing around $7,000 less per year of income right now relative to two years ago because of inflation. At the grocery store alone, prices are still nearly 8 and a half percent higher than they were a year ago.
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