It Finally Happened: The Fed Just Took A BIG Step to Combat Inflation

Well, the Fed really did it. It raised rates by 0.25%, or 25 basis points, and in doing so raised the benchmark interest rate target to a range of 0.25% to 0.50%. That’s the first time it’s done so since 2018.

The reason for the rate hike is inflation. As the Fed Open Market Committee said, “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.”

Further, as Breitbart reports, the Fed has high inflation projections for the rest of the year and sees itself as having to keep raising rates to deal with the inflation issue. In that outlet’s words:

The march projections also show officials expect inflation to be running at 4.3 percent by the end of the year, up from 2.6 percent expected in December. Core inflation, which excludes food and energy prices, is expected to rise 4.1 percent, up from 2.7 percent expected at the end of last year.

The projections also show that Fed officials expect its interest rate target will rise to 2.8 percent by the end of next year and stay that high in the following year, above the expected long-run rate of 2.4 percent. That is an indication that Fed officials think interest rates will have to remain high in order to overcome the inflationary pressures that have gripped the economy since early 2020. Read more

1 thought on “It Finally Happened: The Fed Just Took A BIG Step to Combat Inflation”

  1. I have already felt the pain in the 1970’s when interest on a house loan was at 17%, wages were low and inflation took 3 jobs and side work to keep from going under. The people now days will feel it even more than I did. No matter how you spin the problem, it all comes back to just one man….and it isn’t Putin! Vote for Joe, he’s got your back, Ya Know!

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