Fed Chair Jay Powell now has little choice but to go bigger on rate hikes in a world of high inflation. Doing so is long-term rational, and short-term villainous, writes GinaChon:
Gas prices over the $8.00 mark are advertised at a Chevron Station in Los Angeles, California, U.S., May 30, 2022. REUTERS/Lucy NicholsonWASHINGTON, June 10 - The nice-guy central banker has no place in a world of high inflation.in the United States jumped by a forecast-busting 8.6% in May, year-over-year. Federal Reserve Chair Jay Powell now has little choice but to go bigger on rate hikes, inflicting more pain on people already struggling with high food and gas prices.
Friday’s inflation numbers punctured the theory – borne out by economists surveyed by Reuters – that prices had steadied in May. Instead, they jumped to their highest level since 1981. Grocery costs rose even more than the headline number with a nearly 12% year-on-year increase, the Labor Department said on Friday. Gas, the life-blood of the U.S. economy, was up almost 49% from a year ago.
Powell’s only option is to hurt Americans more. Last month, he essentially ruled out rate increases of more than 0.5 percentage points at a time. With inflation surging rather than receding , he may have to consider larger hikes – say, three-quarters of a percentage point – that will make credit-card balances and mortgages more expensive, and possibly tip the economy into a recession.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
FTC Chair Khan plans key work on kids' data privacy onlineThe head of the Federal Trade Commission says the agency is pushing a robust agenda of actions and policies to help safeguard children’s privacy online
Consulte Mais informação »
CFTC chair eyes disclosures to curb energy consumption in Bitcoin miningWith the right and accurate disclosures, Benham said he expects people will move away from energy consumptive behavior.
Consulte Mais informação »
Colton woman finds $36k in free chair from Craigslist, returns it to ownerDesperate to fill her empty house with furniture, Vicky Umodu searched online for any free furniture she could get her hands on.
Consulte Mais informação »
Upgrade Your Beach Chair With These Cute Target Options — Starting at $15Another reason to shop at Target. ❤️
Consulte Mais informação »
This day in Houston history, June 9, 1959: Fed up with reckless driving
Consulte Mais informação »
No doubts of a 50 bps hike by the Fed – UOBAt its event next week, the Federal Reserve is forecast to raise the FFTR by 50 bps, comments Economist at UOB Group Lee Sue Ann. Key Quotes “Given th
Consulte Mais informação »