With crippling inflation showing no signs of abating, the Federal Reserve this week raised its key interest rate by 0.75% – to the highest level seen since early 2008 – in a record-setting development over which President Joe Biden surely wished not to preside.
As CNBC reported, the central bank is presently endeavoring to reduce inflation from heights not witnessed since the 1980s, with officials also signaling the likelihood of additional rate hikes significantly above where things currently stand.
Addressing the rate increase, Fed Chairman Jerome Powell asserted that his overall message has remained constant since summer, stating that "The [Federal Open Market Committee] is strongly resolved to bring inflation down to 2%, and we will keep at it until the job is done."
As NBC News noted, the Bureau of Labor Statistics reported earlier this month that inflation grew by 8.3% on a year-over-year basis, sparking concerns that the problem is becoming increasingly intractable.
Though the rate hikes are viewed many as the best method of getting inflation in hand, those advocating for the increases have been clear about the fact that the moves will have severe ramifications for everyday Americans, boosting the cost of a host of adjustable-rate consumer borrowing methods, including credit cards, auto loans, and more.
Powell himself acknowledged that every subsequent rate hike brings a greater risk of recession, saying, "No one knows whether this process will lead to a recession or, if so, how significant that recession will be."
Wall Street appeared to take Powell's words seriously, indeed, as the Dow saw a substantial Friday selloff seen as a signal that investors are now admitting that a so-called "soft landing" for the troubled economy may not be in the offing, as the New York Post noted.
Speaking to the outlet, Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, opined, "The market is finally taking the Fed at their word – they are going to cause a recession in order to fight inflation."
Biden, for his part, is turning a characteristically blind eye to the crisis consuming the American economy, blithely telling Scott Pelley of CBS on Sunday that the most recent inflation numbers showed an increase of "just an inch" and that he is "more optimistic" than he's been "in a long time." Sadly, given the startling realities facing consumers at the pump, the supermarket, and just about everywhere else these days, he's likely the only one feeling that way.