‘No good answer’: Fed set for big rate hike despite recession fears
by Sylvan Lane
The Federal Reserve is on track for another steep interest rate hike Wednesday despite growing fears its fight against inflation could push the U.S. into a recession. Fed officials are expected to announce another 0.75 percentage point interest rate hike Wednesday as both job growth and price growth rose, according to federal data. The Fed has aggressively boosted interest rates since March to bring prices down after waiting in vain for months for inflation to decline. The bank has already hiked its baseline interest rate range by 1.5 percentage points this year, including a 0.75 percentage point hike in June…Karen Shaw Petrou, managing partner at Federal Financial Analytics, said the pressures facing the Fed “have only gotten” worse since the bank raised rates in June, forcing the Fed to make tough choices. “You got no meaningful curb on inflation, even with a sharp rate rise. At the same time, financial market stresses and the impact of this inflation on household spending are curbing economic growth,” Petrou said, arguing the Fed should have begun hiking much sooner. “It’s the worst of both worlds. There’s no good answer.”
https://thehill.com/policy/3575467-no-good-answer-fed-set-for-big-rate-hike-despite-recession-fears/