President Joe Biden’s policy failures are having a cascading effect on the economy. To combat the alarming inflation rate, the Federal Reserve Bank will increase interest rates — but that move will have a devastating impact as well.
The Fed reported Wednesday that it would put in place a 75 basis point interest rate increase that will have a ripple effect on several facets of the financial system, The Hill reported. The announced hike is 50% higher than what was expected as officials scramble to combat record inflation.
Consumer prices increased by a whopping 8.6% compared to just one year ago. This marks a record high in the last 40 years and shows no signs of stopping on its own, considering the mess Biden has contributed to, including the war in Ukraine, ongoing supply chain issues with no clear solution, and climbing energy prices due to restrictions on fossil fuel drilling.
However, the cure — increased interest rates — could be more devastating than the problem. Higher interest rates mean money is more expensive to borrow, a fact that will stifle big-ticket purchases like homes and autos.
Also, rising interest rates mean companies have less opportunity to borrow capital and grow. This could mean a depressed job market that will further compound the woes of average Americans.
The stock market is already suffering as consumers are becoming more careful with their money and it is expected to get worse. This again is a problem compounded by rising interest rates and could pose a significant threat to investors’ capital.
The national debt has been the elephant in the room on both sides of the political aisle. Climbing interest rates mean that debt will balloon and cost taxpayers significantly more to pay back.
Biden has run the country into the ground in less time than even former President Jimmy Carter took to do so. Without significant change to the policies that got us here, it seems every solution will only make it worse.