On Wednesday, The Federal Reserve announced interest rates will rise by .75%, marking the highest interests rates since 2008.
The Federal Reserve’s Board of Governors made their announcement in a statement saying, “Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”
The statement sustained the Biden administration’s narrative that the war in Ukraine is one of the most significant contributors to inflation saying, “Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.”
The statement did not mention how Biden’s massive spending plans and how they may have been a factor in the rise in inflation.
Americans have been burdened with extreme inflation during the Biden presidency. And even those officials are signaling a slight reduction in inflation, Americans have continued to see rapid rises in costs of things such as electricity, food and gas prices.
In a speech at the central bank’s symposium, Federal Reserve Chair Jerome Powell said, “Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them.”
Former Vice President Biden said in a statement, “It will take more time and resolve to bring inflation down, which is why we passed the Inflation Reduction Act to lower the cost of healthcare, prescription drugs and energy. And my economic plan is showing that, as we bring prices down, we are creating good paying jobs and bringing manufacturing back to America.”
The increase in interest rates follow another .75% rate hike in June and July. In August, the Bureau of Labor Statics released data stating costs for consumer goods rose 8.3% over the previous year.