The Federal Reserve\u0026#039;s decision Wednesday to hike interest rates by 75 basis points—the largest increase since 1994—heightened fears among economists that the central bank\u0026#039;s attempt to tame inflation risks plunging the U.S. economy into recession and inflicting more pain on vulnerable workers.\r\n\r\nThe Fed\u0026#039;s move came on the heels of worse-than-expected federal data showing that inflation jumped 8.6% in May compared to a year earlier, prompting central bank officials to pursue more aggressive federal-funds rate increases, the Fed\u0026#039;s blunt tool to rein in consumer prices.\r\n\r\n\u0022Relying on the Fed to bring down prices is like treating someone\u0026#039;s fever by putting them in a freezer.\u0022\r\n\r\nBut progressive economists have argued for months that interest rate hikes—which are aimed primarily at slowing demand—are the wrong medicine for inflation driven in large part by skyrocketing gas prices and supply-chain disruptions caused by the pandemic.\r\n\r\n\u0022Relying on the Fed to bring down prices is like treating someone\u0026#039;s fever by putting them in a freezer,\u0022 argued Robert Reich, the former head of the U.S. Department of Labor. \u0022It doesn\u0026#039;t treat the underlying disease, and could make things far worse.\u0022\r\n\r\nWith the Fed expected to continue pushing up rates at a similar pace in the coming months, analysts are growing increasingly concerned that the central bank will induce an economic slowdown and throw millions out of work in its bid to tackle inflation—a potential echo of the infamous Volcker shock of the 1980s.\r\n\r\n\u0022As is well understood, much of the inflation we now see stems from factors that have little to do with the strength of the U.S. economy,\u0022 said Dean Baker, senior economist at the Center for Economic and Policy Research. \u0022The soaring price of oil is due to Russia\u0026#039;s invasion of Ukraine and subsequent sanctions. Fed rate hikes will not bring down the price of gas.\u0022\r\n\r\nJerome Powell, the chair of the Federal Reserve, admitted as much during a press conference following the Federal Open Market Committee\u0026#039;s closed-door meeting on Wednesday.\r\n\r\n\u0022Lots of countries are looking at inflation of 10%, and it\u0026#039;s largely due to commodities prices,\u0022 said Powell, a Trump appointee renominated by President Joe Biden in November. \u0022Gas prices—you know, all-time highs and things like that. That\u0026#039;s not something we can do something about.\u0022\r\n\r\nPowell told reporters that while the Fed is not actively trying to cause a recession in a bid to bring down prices, \u0022there\u0026#039;s always a risk of going too far\u0022 with rate hikes. Powell also acknowledged that \u0022wages are not principally responsible for the inflation that we\u0026#039;re seeing,\u0022 though just last month he said the central bank\u0026#039;s goal is to \u0022get wages down\u0022 even amid evidence that workers\u0026#039; share of income is declining.\r\n\r\nIn a blog post on Wednesday, Reich stressed that \u0022wages are lagging behind inflation.\u0022\r\n\r\n\u0022A more accurate description of what we\u0026#039;re now seeing might be called \u0026#039;profit-price inflation\u0026#039;—prices driven upward by corporations seeking increased profits,\u0022 Reich argued, pointing to a recent analysis by the Economic Policy Institute showing that record-shattering corporate profits have been contributing disproportionately to inflation.\r\n\r\n\u0022I understand the Fed’s urgency, but it has entered dangerous territory,\u0022 Reich wrote. \u0022If the Fed continues down this path—as it has signaled it will—the economy will be plunged into a recession. Every time over the last half-century the Fed has raised interest rates this much and this quickly, it has caused a recession.\u0022\r\n\r\n\u0022A recession will be especially harmful to people who are most vulnerable to downturns in the economy—who are the first to be fired (and last to be hired again when the economy turns upward): lower-wage workers, disproportionately women and people of color,\u0022 he added. \u0022The Fed is making a big mistake.\u0022\r\n\r\nBaker, for his part, noted that Powell is the \u0022first chair in recent decades to explicitly recognize the full employment side of the Fed\u0026#039;s dual mandate and note the huge benefits of low unemployment to Black and Hispanic workers, people with criminal records, and other groups disadvantaged in the labor market.\u0022\r\n\r\n\u0022In keeping with this recognition,\u0022 Baker said, \u0022the Fed would be well-advised to resist the frenzy of inflation fighters who want to see a whole series of large rate hikes.\u0022\r\n\r\n\r\n\r\nRampant inflation, a problem that is hardly unique to the U.S., has become a significant economic and political issue for the Biden administration, particularly as the pivotal midterm elections approach.\r\n\r\nIn an op-ed for the Wall Street Journal late last month, Biden declined to criticize the Fed\u0026#039;s approach to combating inflation, writing that he has \u0022appointed highly qualified people from both parties to lead that institution.\u0022\r\n\r\n\u0022The Federal Reserve has a primary responsibility to control inflation,\u0022 the president wrote. \u0022My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation. I won\u0026#039;t do this... I agree with their assessment that fighting inflation is our top economic challenge right now.\u0022\r\n\r\nBiden proceeded to voice support for legislative action to drive down housing and prescription drug costs, Democratic priorities that are stalled in the Senate due largely to Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.). On Tuesday, the president sent a letter to the top executives of major U.S. oil and gas companies imploring them to ramp up production to reduce prices.\r\n\r\nBut recent survey data indicates that voters overwhelmingly want the president to more forcefully crack down on price-gouging corporations as a way to bring down costs at gas pumps, grocery stores, pharmacies, and elsewhere across the economy. Voters also support a windfall tax on oil and gas giants that are exploiting Russia\u0026#039;s war on Ukraine to rake in huge profits.\r\n\r\n\u0022Ahead of the midterms, voters across the nation are eager to support candidates who embrace economic populism and prove to the American people that corporations are no longer above the law,\u0022 said Helen Brosnan, executive director of Fight Corporate Monopolies.