U.S. Federal Reserve Bank Board Chairman Jerome Powell answers reporters' questions during a news conference in Washington, D.C. on November 2, 2022.
(Photo: Chip Somodevilla/Getty Images)
Nov 02, 2022
As the U.S. Federal Reserve on Wednesday raised interest rates--the fourth consecutive 0.75% increase and the sixth hike of the year--progressives stressed that Fed policy boosts the likelihood of a global recession and disproportionately harms low-income workers and other marginalized people.
"Working people should not be the target of lowering inflation, it should be corporations that are earning record profits."
Fed Chair Jerome Powell explained that the move was necessary to ease inflation, which has hit a 40-year-high due to factors including corporate profiteering, Russia's invasion of Ukraine, and the climate emergency.
"We've always said it was going to be difficult," he said, "but to the extent rates have to go higher and stay higher for longer it becomes harder to see the path" to avoiding recession.
"I would say the path has narrowed over the course of the last year," Powell added.
Progressive economists and activists refuted the Fed's approach.
Accountable.US spokesperson Liz Zelnick noted in a statement that "a chorus of economic experts have warned hiking interest rates again is a recipe for millions of Americans receiving pink slips, yet the Fed has decided to triple down on what is not working."
\u201cRelying on the Fed to raise interest rates puts the burden of fighting inflation mostly on lower-wage workers, who are already hurting most from rising prices.\n\nStop raising interest rates.\n\nWhy not target an actual driver of inflation? Price-gouging corporations. Hello?\u201d— Robert Reich (@Robert Reich) 1667414746
"Throughout the pandemic, the Fed should have been acting as stewards of the fragile economic recovery but instead have prioritized demands from big banks, hedge funds, and other Wall Street special interests at the great expense of average working families," she contended.
"If excessive interest rate hikes hasten the arrival of an otherwise avoidable recession, will the Fed take responsibility," added Zelnick, "or try to pass the buck as they keep making matters worse?"
\u201cFed Chair Powell is on record saying these interest rate hikes aren't designed to lower prices but to lower wages.\n\nThe strategy is clear: increase unemployment + increase employers' power. If the Fed doesn't slow down they will force a recession. https://t.co/CMlBVICwFO\u201d— Demand Progress (@Demand Progress) 1667404736
AFL-CIO president Liz Shuler said the Fed's latest rate hike "will have a direct and harmful impact on working people and our families" and "will not address the underlying causes of inflation."
"The Fed seems determined to raise interest rates, though it openly admits those rates could ruin our current economy as unemployment remains low and people are able to find jobs," she continued. "A recession would instead cause companies to hire fewer people, making it harder for young workers, workers of color, and others who have greater barriers finding jobs, and put downward pressure on the wages of all working people who will bear the brunt of an overactive monetary policy."
"Working people should not be the target of lowering inflation," Schuler added, "it should be corporations that are earning record profits."
\u201cFor the 6th time this year, the Fed jacked up interest rates \u2014 and for the 6th time pushed us precariously closer to a recession that will depress wages, kill jobs & hurt millions of families.\n\nThe cure is certainly worse than the disease.\n\nhttps://t.co/gN0y3ZuCT3\u201d— Groundwork Collaborative (@Groundwork Collaborative) 1667414296
Anticipating Wednesday's rate hike, Groundwork Collaborative chief economist Rakeen Mabud argued Tuesday that the move is a "misguided policy with catastrophic outcomes for the millions around the country who are already struggling to make ends meet."
"The Fed's rate-hiking frenzy is doing everything but lowering prices," she said. "Wage growth is slowing and mortgage rates are the highest in 20 years. If Powell wants to be taken seriously as a responsible steward of the economy, he should think twice before raising rates again."
Progressive former U.S. Labor Secretary Robert Reich tweeted: "Memo to the Fed: Interest rate hikes aren't working because inflation is being driven by corporations using it as cover to price gouge the people."
Join Us: News for people demanding a better world
Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place. We're hundreds of thousands strong, but every single supporter makes the difference. Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. Join with us today! |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
afl-ciocapitalismcorporate powerdemand progressfederal reserveinequalityrights & justicerobert reichworkersbig bankscorporate profitseconomistsgroundwork collaborativejerome powellprogressiverecessionfed rate hikes
As the U.S. Federal Reserve on Wednesday raised interest rates--the fourth consecutive 0.75% increase and the sixth hike of the year--progressives stressed that Fed policy boosts the likelihood of a global recession and disproportionately harms low-income workers and other marginalized people.
"Working people should not be the target of lowering inflation, it should be corporations that are earning record profits."
Fed Chair Jerome Powell explained that the move was necessary to ease inflation, which has hit a 40-year-high due to factors including corporate profiteering, Russia's invasion of Ukraine, and the climate emergency.
"We've always said it was going to be difficult," he said, "but to the extent rates have to go higher and stay higher for longer it becomes harder to see the path" to avoiding recession.
"I would say the path has narrowed over the course of the last year," Powell added.
Progressive economists and activists refuted the Fed's approach.
Accountable.US spokesperson Liz Zelnick noted in a statement that "a chorus of economic experts have warned hiking interest rates again is a recipe for millions of Americans receiving pink slips, yet the Fed has decided to triple down on what is not working."
\u201cRelying on the Fed to raise interest rates puts the burden of fighting inflation mostly on lower-wage workers, who are already hurting most from rising prices.\n\nStop raising interest rates.\n\nWhy not target an actual driver of inflation? Price-gouging corporations. Hello?\u201d— Robert Reich (@Robert Reich) 1667414746
"Throughout the pandemic, the Fed should have been acting as stewards of the fragile economic recovery but instead have prioritized demands from big banks, hedge funds, and other Wall Street special interests at the great expense of average working families," she contended.
"If excessive interest rate hikes hasten the arrival of an otherwise avoidable recession, will the Fed take responsibility," added Zelnick, "or try to pass the buck as they keep making matters worse?"
\u201cFed Chair Powell is on record saying these interest rate hikes aren't designed to lower prices but to lower wages.\n\nThe strategy is clear: increase unemployment + increase employers' power. If the Fed doesn't slow down they will force a recession. https://t.co/CMlBVICwFO\u201d— Demand Progress (@Demand Progress) 1667404736
AFL-CIO president Liz Shuler said the Fed's latest rate hike "will have a direct and harmful impact on working people and our families" and "will not address the underlying causes of inflation."
"The Fed seems determined to raise interest rates, though it openly admits those rates could ruin our current economy as unemployment remains low and people are able to find jobs," she continued. "A recession would instead cause companies to hire fewer people, making it harder for young workers, workers of color, and others who have greater barriers finding jobs, and put downward pressure on the wages of all working people who will bear the brunt of an overactive monetary policy."
"Working people should not be the target of lowering inflation," Schuler added, "it should be corporations that are earning record profits."
\u201cFor the 6th time this year, the Fed jacked up interest rates \u2014 and for the 6th time pushed us precariously closer to a recession that will depress wages, kill jobs & hurt millions of families.\n\nThe cure is certainly worse than the disease.\n\nhttps://t.co/gN0y3ZuCT3\u201d— Groundwork Collaborative (@Groundwork Collaborative) 1667414296
Anticipating Wednesday's rate hike, Groundwork Collaborative chief economist Rakeen Mabud argued Tuesday that the move is a "misguided policy with catastrophic outcomes for the millions around the country who are already struggling to make ends meet."
"The Fed's rate-hiking frenzy is doing everything but lowering prices," she said. "Wage growth is slowing and mortgage rates are the highest in 20 years. If Powell wants to be taken seriously as a responsible steward of the economy, he should think twice before raising rates again."
Progressive former U.S. Labor Secretary Robert Reich tweeted: "Memo to the Fed: Interest rate hikes aren't working because inflation is being driven by corporations using it as cover to price gouge the people."
As the U.S. Federal Reserve on Wednesday raised interest rates--the fourth consecutive 0.75% increase and the sixth hike of the year--progressives stressed that Fed policy boosts the likelihood of a global recession and disproportionately harms low-income workers and other marginalized people.
"Working people should not be the target of lowering inflation, it should be corporations that are earning record profits."
Fed Chair Jerome Powell explained that the move was necessary to ease inflation, which has hit a 40-year-high due to factors including corporate profiteering, Russia's invasion of Ukraine, and the climate emergency.
"We've always said it was going to be difficult," he said, "but to the extent rates have to go higher and stay higher for longer it becomes harder to see the path" to avoiding recession.
"I would say the path has narrowed over the course of the last year," Powell added.
Progressive economists and activists refuted the Fed's approach.
Accountable.US spokesperson Liz Zelnick noted in a statement that "a chorus of economic experts have warned hiking interest rates again is a recipe for millions of Americans receiving pink slips, yet the Fed has decided to triple down on what is not working."
\u201cRelying on the Fed to raise interest rates puts the burden of fighting inflation mostly on lower-wage workers, who are already hurting most from rising prices.\n\nStop raising interest rates.\n\nWhy not target an actual driver of inflation? Price-gouging corporations. Hello?\u201d— Robert Reich (@Robert Reich) 1667414746
"Throughout the pandemic, the Fed should have been acting as stewards of the fragile economic recovery but instead have prioritized demands from big banks, hedge funds, and other Wall Street special interests at the great expense of average working families," she contended.
"If excessive interest rate hikes hasten the arrival of an otherwise avoidable recession, will the Fed take responsibility," added Zelnick, "or try to pass the buck as they keep making matters worse?"
\u201cFed Chair Powell is on record saying these interest rate hikes aren't designed to lower prices but to lower wages.\n\nThe strategy is clear: increase unemployment + increase employers' power. If the Fed doesn't slow down they will force a recession. https://t.co/CMlBVICwFO\u201d— Demand Progress (@Demand Progress) 1667404736
AFL-CIO president Liz Shuler said the Fed's latest rate hike "will have a direct and harmful impact on working people and our families" and "will not address the underlying causes of inflation."
"The Fed seems determined to raise interest rates, though it openly admits those rates could ruin our current economy as unemployment remains low and people are able to find jobs," she continued. "A recession would instead cause companies to hire fewer people, making it harder for young workers, workers of color, and others who have greater barriers finding jobs, and put downward pressure on the wages of all working people who will bear the brunt of an overactive monetary policy."
"Working people should not be the target of lowering inflation," Schuler added, "it should be corporations that are earning record profits."
\u201cFor the 6th time this year, the Fed jacked up interest rates \u2014 and for the 6th time pushed us precariously closer to a recession that will depress wages, kill jobs & hurt millions of families.\n\nThe cure is certainly worse than the disease.\n\nhttps://t.co/gN0y3ZuCT3\u201d— Groundwork Collaborative (@Groundwork Collaborative) 1667414296
Anticipating Wednesday's rate hike, Groundwork Collaborative chief economist Rakeen Mabud argued Tuesday that the move is a "misguided policy with catastrophic outcomes for the millions around the country who are already struggling to make ends meet."
"The Fed's rate-hiking frenzy is doing everything but lowering prices," she said. "Wage growth is slowing and mortgage rates are the highest in 20 years. If Powell wants to be taken seriously as a responsible steward of the economy, he should think twice before raising rates again."
Progressive former U.S. Labor Secretary Robert Reich tweeted: "Memo to the Fed: Interest rate hikes aren't working because inflation is being driven by corporations using it as cover to price gouge the people."
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.